UPDATE 2-Brazil's Vale: no iron for China if no better price

* China demand for metals slumps

* Vale seeks 12 pct boost in iron ore price

* Vale sees recession lasting 6-10 months

* Vale shares close 3.3 pct lower (Adds comments on output cuts in Asia, closing share price)

By Raymond Colitt

BRASILIA, Oct 24 (Reuters) - Brazil's Vale, one of the world's top three miners, said on Friday that Chinese demand for metals was down sharply but that it wouldn't ship iron ore without a 12 percent price increase.

"Chinese demand is much weaker; there are cuts in steel production there," Fabio Barbosa, chief financial officer, said on a conference call with investors.

Global demand for metals and minerals would weaken further in coming months due to the deepening of the global financial crisis, he said.

"We now face a new global scenario," Barbosa said.

But Vale (VALE5.SA) RIO.N would not ship iron ore to China without obtaining a 12 percent price increase, which the Chinese have been refusing to pay, Barbosa said.

China is Vale's main market for iron ore and pellets.

Vale would wait for its competitors to sell iron ore cheaply now but expected higher-cost producers to disappear from the market soon.

"Some inefficient suppliers will be out of the market in a few months, next year we'll renegotiate the price in a new environment," Barbosa said.

The company announced net profit on Thursday of $4.8 billion, up 64 percent from the same period last year, on record gross revenues and iron ore sales.

The world's biggest iron ore producer could hold out for a while, said Chief Executive Officer Roger Agnelli.

"We are not pressed to sell our products at any price," Agnelli said.