Rio Tinto Ltd. (RTP) and BHP Billiton Ltd. (BHP) both confirmed Wednesday they are continuing iron ore contract price negotiations with Chinese steel makers.

The miners have agreed price cuts of between 33% and 44% with steel mills in Japan and other Asian countries, but Chinese mills are holding out for deeper cuts.

Rio Tinto Iron Ore Chief Executive Sam Walsh has said that some of the miner's contracts expire on June 30, and that if no price agreement was reached by that date they could be annulled leaving steel mills to purchase iron ore in the spot market.

A spokesman for Rio Tinto declined to comment Wednesday on whether these contracts had now expired and migrated to the spot market.

He said he could confirm that, in line with statements from the China Iron & Steel Association, price talks were continuing.

There have been some signs that the Chinese may be softening their stance with Hebei Iron & Steel Group Co. Vice General Manager Tian Zhiping Tuesday saying that, while Chinese negotiators still want deeper cuts than those accepted by Japanese mills, they would not necessarily push for the 40% cut to iron ore fines prices which they had been seeking previously.

The stand off over pricing between the biggest producers and world's biggest consumer or iron ore is putting pressure on the decades old benchmark system of pricing the key steelmaking input.

BHP Billiton has been arguing for a change to an indexed pricing system that would see prices reset more regularly with reference to one of the iron ore indexes now operating, in an effort to better reflect shifts in the market during the year.

The Australian Financial Review newspaper reported Wednesday that, while the dispute over pricing drags on, BHP is allowing some Chinese mills to buy ore at indexed prices which are in line with the new benchmark.

A spokesman for BHP declined to comment on the report, but confirmed that price talks are continuing.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; alex.wilson@dowjones.com