China seeks to keep iron ore long co-pricing mechanism

China hopes to maintain the current iron ore long co-pricing negotiation mechanism and to keep the iron ore prices at a reasonable level, said Jia Yinsong, an official with China's Ministry of Industry and Information Technology (MIIT) March 23.

Jia said that the current mechanism will benefit all parties in the long run. "We oppose any forms of monopoly not in line with the market rule."

He said demands by global iron ore producers for massive price hikes are complicating ongoing negotiations. China's whole steel industry will suffer from negative profits if iron ore prices rise by 90 percent.

"The MIIT believes that both parties' interests should be represented in the negotiation and backs domestic steel mills as well as the industry associations," Jia said.

Recent reports have suggested iron ore producers Rio Tinto and BHP Billiton have signed quarterly iron ore sales contracts with some Japanese customers in a departure from the system of annual contract negotiations on price.

"Negotiations are under way and I'm not aware that anyone has actually signed an agreement," Rio Tinto Iron Ore chief executive Sam Walsh said.

By People's Daily Online