Recent reports from China Business News that Chinese steelmakers have agreed to a 33% iron ore price cut with Rio Tinto are incorrect, vice president of Hebei Iron & Steel Group Tian Zhiping told journalists yesterday.
“The iron ore price talks are still going on,” Zhiping said.
“The China Iron and Steel Association (CISA) would inform us immediately if it is going to sign the agreement, but so far we have not heard anything.”
Hebei Steel is the second largest steel mill in China.
Citing unnamed sources, China Business News reported earlier this week that CISA had agreed to the 33% cut, which would bring China in line with other Asian countries that have already agreed to the price.
But according to Zhiping, Rio Tinto and CISA have not reached a deal.
“Rio has not become more flexible,” he said.
CISA has reportedly been demanding a price cut of between 40% and 45%, while Rio Tinto has stood firm on 33%.
IBISWorld resource analyst Sam Ellis told MINING DAILY that if the Chinese were to agree to the cut, it would not be as large a compromise as some may think.
“It would be a concession, but it would really just bring them in line with Japan, South Korea and Taiwan,” he said.
“Although they have been playing hardball and attempting to get a bigger price cut, they would be back in line with the rest of the world so it is really not a huge deal.”