The China Iron and Steel Association (CISA) denied reports
Tuesday that Chinese steelmakers would accept a 19-percent rise in
contract prices and explained that the country's steel mills had
decided to continue negotiations over the price of iron ore with
major foreign mines.
"We will continue price talks with the mines in June," a
reliable source with the CISA who declined to be named told Xinhua.
"We don't accept the price increase," he said. .
Chinese steel mills made the decision at a recent national
meeting after the world's leading iron ore provider, Brazil's
Companhia Vale do Rio Doc (CVRD) and German steel producer Thyssen
Krupp AG, agreed May 16 on the 19-percent increase in contract
prices of iron ore.
Chinese steel mills are intent on continuing negotiations
although some of their foreign counterparts have agreed to the
price rise, the source said. They've refused to send letters of
confirmation on the increase to the CVRD. The source said, "talks
on prices are not yet concluded."
They hope to negotiate a lower price increase after being forced
to accept a 71.5 percent rise in the iron ore price last year,
added the source.
To date Chinese steel mills have not reached agreement with the
world's three largest iron ore suppliers -- Anglo-Australian BHP
Billiton, Australia's Rio Tinto Group and Brazil's CVRD.
The CISA has said that setting the iron ore price without
considering the Chinese market, the world's biggest buyer, was
unacceptable.
It said the Chinese central government had worked out a set of
policies aiming to regroup the iron and steel industry and phase
out old production methods in order to upgrade the industry. It was
felt this would?help dampen China's demand for imported iron
ore.
China had always hoped to achieve a win-win situation in iron
ore price talks based on the principle of equality and mutual
benefit and the international market supply and demand position,
said CISA.
Chinese steel firms imported 275 million tons of iron ore last
year which was about 43 percent of the global marine trade volume
of the ore and 70 percent of Asia's total imports. It's estimated
that China will import about 301 million tons of iron ore in 2006,
an increase of 10 percent from 2005, the CISA predicated earlier
his month.
Currently, the European market reports the highest price for
steel, the official said.
By the end of April, the composite steel price index on the
global market rose to 149 points, close to last year's highest
153.4 points. However, the composite steel price index on the
Chinese market only reported 105.67 points at the end of April
which is down 23.6 percent from March's highest 138.33 points.
"Under such circumstances when the Asian market, especially the
Chinese market, is at a low price level, Chinese steel firms would
not accept a decision being taken without taking into account their
market," the CISA said.
(Xinhua News Agency May 31, 2006)