With price dispute derailing iron talks, govt may step in

09:14, March 17, 2010      

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The Ministry of Commerce advocates maintaining a long-term iron ore price agreement mechanism to avoid volatility, the ministry's spokesman, Yao Jian, said at a regular press briefing Tuesday.

Yao said the ministry, along with the Ministry of Industry and Information Technology, will provide support to Chinese steel companies including "necessary support of trade practices" in the stalled iron ore negotiations, but he did not elaborate.

Talks have reportedly broken down over the size of a proposed price increase in iron ore supplies.

China has been the world's largest steelmaker for the past six years and currently is the largest consumer of iron ore, followed by Japan, Korea, the United States and the European Union.

In 2006, China produced 588 million tons of iron ore, up 38 percent year-on-year.

China's import volume is expected to exceed 400 million tons this year.

Yuan Gangming, a researcher with the Center for China in the World Economy of Tsinghua University, said "Chinese private steel companies can not afford the price hike, but they can do nothing about it."

Chinese steel companies are still in talks with BHP Billiton, Rio Tinto and Vale of Brazil, the world's top three iron ore exporters.

Earlier reports said Zhang Xiaogang, general manager of Anshan Iron and Steel, believes the result of the negotiations will come out by April 1.

Source: Global Times
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