Chinese steelmakers, locked in annual negotiations with iron ore miners, don't want to pay more for supplies of the steelmaking ingredient, Baosteel Group Corp Chairwoman Xie Qihua told reporters.

Producers, including Baosteel and Nippon Steel Corp, buy iron ore from companies such as Rio de Janeiro-based Cia. Vale do Rio Doce under long-term contracts. Prices agreed in the negotiations take effect from April 1, the start of the Japanese financial year. This is the first time since 2003 that a price settlement has not been reached by the end of March.

"To be sure, we don't want prices to increase," Xie said at the 4th International Steel Congress in Beijing yesterday. She said she doesn't know if prices will be settled this month.

Vale, London-based Rio Tinto Group and Melbourne-based BHP Billiton control 75 per cent of seaborne iron ore exports. The producers won a record 71.5 per cent price increase last year. Baosteel Group, China's biggest producer, represents the country's 16 largest steelmakers in the talks.

"The differences in the negotiation between steelmakers and miners are narrowing," said Luo Bingsheng, vice-chairman and secretary general of China Iron & Steel Association. He didn't say when talks will come to an end.

Steelmakers and miners "couldn't find a point of mutual benefit. That resulted in slow progress at this year's talks," Wu Xichun, former chairman of the China Iron and Steel Association, said at yesterday's conference.

Chinese steelmakers want a bigger say in setting prices after tripling imports in the past five years and overtaking Japan as the single-largest buyer in 2003. Global benchmark prices have traditionally been set by Japanese or European steelmakers with iron ore producers.

China's iron ore imports surged 32 per cent last year to 275 million tons, and the nation now accounts for 43 per cent of global iron ore trade.

Soaring iron ore prices have spurred the nation's miners to speed up production , much of which has low iron content, Wu said yesterday. China plans to increase iron ore output by 102.3 million tons by 2010 to cut reliance on imports, Wang Yongguang, vice-president of China Metallurgical Construction (Group) Corp, said last month.

Source: China Daily