Hammered ore prices threaten Chinese iron miners (2)

Imported iron ores with more flexible prices and higher quality appeal more to the country's steelmakers. Iron ores from the "Three Mines," namely BHP Billiton, Companhia Vale Do Rio Doce and Rio Tinto, constitute the bulk of China's ore imports.

Ore prices have wobbled freely on the basis of supply and demand since being unpegged from a yearly agreement struck between providers and consumers to set a basis price for iron ores for the whole year.

The volatility of ore prices have put Chinese iron ore miners in an unsafe situation in which a group of domestic miners who produce at around 120 U.S. dollars per tonne will be kicked out of the market if the ore price dips below such that level.

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