Chinese steel industry officials late Tuesday said they haven't reached a decision on a response to Anglo-Australian miner Rio Tinto Plc's (RTP) iron ore price deal with Japan's Nippon Steel Corp. (5401.TO).

The deal that saw 2009-10 iron ore prices cut between 33% and 44%, threatens to undermine China's demand for deeper cuts and its position as benchmark setter for Asian term prices.

"There's a possibility we'll persist with our request for price cuts of 40%-45% (from last year's term prices), but whether or not that will happen, I can't tell you now," said Zou Jian, an executive director at the China Iron and Steel Association.

Separately, Shan Shanghua, the association's secretary-general, told reporters that CISA is still studying the issue, and had not reached a conclusion yet.

In a statement earlier in the day, Rio Tinto said it has agreed on a price of 97 cents per dry metric ton for Pilbara and Yandicoogina iron ore fines, compared with $1.446 last year, and $1.12 a ton for lump, down from $2.0169 last year.

This is the first deal of the year and could become the benchmark for the other two big miners, BHP Billiton Ltd. (BHP) and Companhia Vale do Rio Doce (RIO), which are continuing negotiations with steel mills.

Industry officials close to negotiations said JFE Steel Corp., a unit of JFE Holdings Inc. (5411.TO)), Sumitomo Metal Industries Ltd. (5405.TO) and Kobe Steel Ltd. (5406.TO) have also accepted the same terms as Nippon, with other Japanese mills expected to follow suit, effectively making this the official Japanese price for the year. .

Ding Shouhu, chief negotiator for Baosteel Group Corp., said he needed to confirm terms of the Rio-Nippon deal before commenting.

Baoshan Iron & Steel Co. (600019.SH), or Baosteel, is the biggest steel maker in China and has been leading the Chinese side in this year's price negotiations.

Ding declined to confirm if China would still stick to its demands from miners for a 40%-45% price cut.

Last Thursday, Shan had said the Chinese side would demand a 45% price cut from Rio Tinto and a 40% cut from Brazilian miner Vale.

BHP is widely expected to be the next to set terms with Japan, after Rio Tinto's announcement Tuesday. Vale has said it would wait to see the terms secured by Rio Tinto and BHP before concluding its own price talks.

-By Chuin-Wei Yap and Juan Chen, Dow Jones Newswires; 8610 6588 5848; chuin-wei.yap@dowjones.com, juan.chen@dowjones.com