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China iron ore pricing talks miss deadline

China iron ore pricing talks miss deadline

Chinese steelmakers expect pricing talks with major global iron ore suppliers to continue, reports said Wednesday, after the two sides failed to reach agreement by a June 30 deadline.
China's steel industry group has rejected iron ore price agreements negotiated between Australian mining giant Rio Tinto and Japanese and South Korean mills.
An official at the China Iron and Steel Association refused comment, saying any news would be posted on the group's Web site.
However, the official Xinhua News Agency cited CISA official Chen Xianwen, as saying that the talks would persist.
Rio Tinto Ltd., the world's third-biggest miner, agreed with Japan's Nippon Steel Corp. last month to cut its iron ore prices by about one-third. The Chinese side had been seeking cuts of more than 40 percent, but might soften its stance and settle on cuts somewhere between 33 percent and 40 percent below last year's prices, the Shanghai Securities News reported.
Other major ore suppliers are Brazil's Vale SA and Australia's BHP Billiton Ltd.
CISA's 119 members represent 90 percent of China's steel output. The group took the lead in price talks this year, replacing Shanghai-based Baoshan Iron & Steel.
Traditionally the industry has accepted the results of the pricing talks as an annual benchmark, but in recent years negotiations have become increasingly drawn-out and confrontational, with the Chinese side publicly complaining that it should have more say as the world's biggest iron ore importer.
Chinese steel makers have objected to a planned tie up between Rio Tinto and BHP Billiton Ltd., which they say may give the miners an inordinate say over supplies and pricing.
Increasingly the mills have turned to the spot market for iron ore as they ramp up imports to build up stockpiles. As of late last month, domestic port inventories of iron ore had reached nearly 71.3 million metric tons, equal to more than a month's supply, the state-run newspaper China Securities Journal reported.
With the pricing deadline passed, iron ore miners have the right to dissolve current contracts and sell iron ore at spot prices. Those are now higher than the benchmark price, but more volatile.
It was unclear if spot prices are being used for sales to China's big steel mills now that the June 30 negotiating deadline has passed. A spokesman for Rio Tinto Ltd., the company taking the lead in price negotiations, refused to say.
A BHP Billiton spokesman was not immediately available for comment.
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Associated Press researcher Bonnie Cao in Beijing contributed to this report.
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On the Net:
http://www.chinaisa.org.cn/index.php?styleid2


Updated : 2021-01-24 21:44 GMT+08:00