Iron ore price talks go beyond deadline

(Xinhua)
Updated: 2009-06-30 14:33

BEIJING: The annual iron ore price negotiations between the world's biggest iron ore miners and Chinese steel makers are likely to continue past the Tuesday deadline.

China is still in talks with major iron ore firms for the annual supply deal, Chen Xianwen, director of the market operations department of the China Iron and Steel Association (CISA), told Xinhua Tuesday.

The CISA heads the talks on behalf of China's steel-makers.

"We are officially in discussions still," said Gervase Greene, spokesman of Rio Tinto, in an email to Xinhua late Monday.

Chen said that the CISA still insisted that the iron ore prices should fall back to 2007 levels, which meant a price cut of more than 40 percent in the annual contracts of iron ore.

The CISA said in a statement on May 31 that China's steel companies would refuse to accept the 33-percent price cut reached between Rio Tinto and Japan's Nippon Steel Corp.

The price cut would lead to overall losses for Chinese steel companies, the CISA said in the statement.

The Chinese side was working to seek a cut of more than 40 percent.

Both Chen and Greene refused to comment further on how the talks were progressing.

If the CISA failed to reach a supply agreement with any of the three biggest mining companies -- Vale of Brazil, Rio Tinto and BHP Billiton -- Chinese steel makers may have to turn to the spot market for supplies.

Spot iron ore prices rose to the highest in four months and above the annual benchmark level agreed between the three miners and big steel makers elsewhere in Asia.