Iron ore talks reportedly underway

Contract price negotiations are said to be happening in Singapore between Chinese steel makers and Australian iron ore producers.

A Chinese newspaper has reported that a number of major Chinese steel producers have begun 2010 contract price discussions with the world’s three largest iron ore producers.

According to the Chinese Times, the steel makers, including Baosteel and Wuhan Iron and Steel, are in Singapore to hold discussions with BHP Billiton, Rio Tinto and Brazil’s Vale.

The report does not say whether the China Iron and Steel Association (CISA) is involved in the discussions.

The newspaper does not cite any sources for the story.

Iron ore contract price negotiations between Australian and China broke down last year when CISA refused to budge on its stance that Australian producers offer China a larger discount than other Asian customers.

China was eventually forced to buy iron ore at spot market prices, which ultimately soared significantly higher than the discounted contract price Rio Tinto established with its Japanese and South Korean customers.

China’s Ministry of Industry and Information Technology revealed last week that Baosteel would replace CISA as lead negotiator in the upcoming price negotiations.

When contacted by MINING DAILY, a spokesperson for BHP would not confirm or deny the company’s involvement in the price talks.

Rio Tinto was not available for comment.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.