UPDATE: China Iron Ore Price Deal Unlikely This Week -Source
July 27 2009 - 6:08AM
Dow Jones News
China's standoff with global miners over this year's iron ore
term price isn't expected to be resolved this week, a person
familiar with the matter said Monday.
Responding to comments last week by a top Chinese steel
executive that a settlement could be reached this week, the person
told Dow Jones Newswires an agreement this week was unlikely while
Anglo-Australian Rio Tinto PLC (RTP) tries to resolve the issue of
imprisonment of four employees, including Australian citizen Stern
Hu, by the Chinese government on charges of espionage linked to the
ore price talks.
Li Xiaowei, chairman of China's Hunan Valin Iron and Steel Group
and a vice chairman of the China Iron and Steel Association, told
reporters Thursday a settlement was expected in 10 days and China
wouldn't accept a price cut of 33%, referring to the benchmark
price Rio Tinto and BHP Billiton Ltd. (BHP) have agreed to with
other Asian ore buyers.
The association is leading China in the price talks with Rio
Tinto, BHP and Brazilian miner Vale S.A. (VALE), which have broken
down amid the spying and bribery charges.
Li's comments also appear to have sparked internal disagreement
among Chinese steel mills.
A Steel Business Briefing report Monday said steel industry
sources doubted the talks could be concluded in 10 days as Li
suggested.
An official from Baosteel Group Corp., China's largest mill by
output, told Steel Business Briefing "he had heard nothing to
indicate the negotiations will be completed soon."
"He knew of no schedule set for the talks to reconvene," the SBB
report said.
The report also cited another unidentified mill official saying
that, unless miners or mills presented a new proposal, the impasse
was unlikely to be broken.
-By Chuin-Wei Yap, Dow Jones Newswires; 8610 6588 5848;
chuin-wei.yap@dowjones.com