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Chinese major steel mills will continue to push for a better pricing deal although some Asian mills have accepted a 19 percent rise in 2006 long-term iron ore prices.

 

"Chinese firms will not agree on iron ore prices without considering the market," the China Iron and Steel Association said on its website after 16 major Chinese mills met in Beijing.

 

The statement came after Australian miner Rio Tinto Ltd Plc announced that some Japanese steel firms had agreed on a 19 percent rise in 2006 long-term prices. The company did not disclose which companies they were.

 

CVRD, the world's top iron ore supplier, also said South Korea's POSCO CO Ltd had agreed on the price rise. The association said steel prices in the European market are reaching very high levels but prices in Asia, particularly in China, are about 20 percent lower than last year's peak.

 

It said any price hike should not be regarded as a global benchmark if it was not reached with the three major buyers, China's Baosteel, Japan's Nippon Steel Corp and Europe's Arcelor SA.

 

Traditionally, the first price agreed by a major supplier and a major importer forms a benchmark that is followed by others.

 

This year's iron ore price talks, headed by China's largest steel makers Baosteel, are still ongoing, the association said.

 

The Chinese industry opposed some miners' behavior to pressure Chinese firms to accept the rise by linking iron ore supply contracts with coal supply contracts.

 

China accounts for over 40 percent of global iron ore shipment and over 70 percent of Asia's imports.

 

Chinese mills last year accepted a 75 percent increase in iron ore prices, which were first agreed by Nippon Steel Corp.

 

(China Daily May 23, 2006)