Posted on 21 May 2009
CHINESE steel mills are seeking a 45 per cent iron ore benchmark-price cut from Rio Tinto and a 40 per cent cut from Brazilian miner Vale do Rio Doce, the official Xinhua news agency reported today.
Rio Tinto mining activity
Silence is broken: Chinese negotiators have until now not divulged how deep a cut to iron ore prices they would expect from Rio Tinto, BHP Billiton and Vale. Picture: Bloomberg
The China Iron and Steel Association will soon make a statement calling for these levels of cuts from last year's benchmark rates, the report said, quoting Shan Shanghua, the association's secretary-general.
The Chinese side has called for a cut of about 40-50 per cent, but until now have never been specific about how much it would demand, or had demanded, of each miner.
The report did not specify how much of a cut the Chinese would ask from BHP Billiton, but both BHP and Rio Tinto got the same price-increase last year, of about 88 per cent; in contrast, Vale got a 65 per cent raise.
The mining majors are locked in negotiations with the Chinese over iron ore prices.
