Though Chinese steelmakers failed to get a favorable result in the protracted iron ore trade negotiations and on Tuesday accepted a 19-percent price hike on the resources, they would like to continue to demand a greater say in future talks.

Baosteel, the nation's largest steel producer that is representing Chinese steelmakers, reached the agreement with Anglo-Australian mining firm BHP Billion.

Baosteel reached similar agreements with Australia's Rio Tinto Group and Brazil's Companhia Vale do Rio Doc (CVRD). The details would be released on Wednesday and Thursday respectively, sources close to the leading steelmaker said.

The 19-percent price rise followed a record 71.5 percent hike in 2005.

Sources with the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC), said that the CCCMC and the China Iron and Steel Association, two major industrial chambers of steel, will not make official comment on the deal now, but they may release a joint circular after Baosteel released details of the agreements.

No obvious reflection in the sector of iron and steel was seen in China's A share market on Wednesday.

Chinese steel mills had tried hard to secure a lower price in the seven-month-long negotiations before they had to accept the new price increase.

Though the attempts ended up with a failure, the talks still set a good exemple, according to Mei Xinyu, a reseracher with the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce.

Some wondered that since China had gained the status of a major negotiator, why it was still unable to win the chance to initiate its own pricing schemes.

However, industry observers admitted that Chinese steel producers had somehow gained a say in global iron ore trade talks.

At least half of the seven months, resources suppliers had discussions with Chinese buyers about the world ore market.

CVRD representatives said Chinese mills would be able to play a bigger role in future negotiations, taking into account China's market scale.

Nonetheless, industry observers said in past rounds of talks, Chinese steel mills appeared to be less experienced compared with their rivals, who have controlled the market for years.

According to informed sources, the Australian ore supplier had had talks with Chinese representatives on a possible 10-15-percent price rise before it heard that CVRD called a 24.6-percent hike. The observers said the tactic made use of flaws in the negotiation mechanism and eroded the atmosphere of the talks.

In the extended negotiations, the sellers managed to circumvent the three major buyers and made a breakthrough among less influential steelmakers, then they pressurized the big three to bow to their demand.

On May 16, Germany's ThyssenKrupp AG became the first steelmaker globally to agree to the new price. It was followed by steel mills from other European nations and Japan.

Chinese steelmakers account for 43 percent of global imports of iron ore. But top buyers may not be assured with top say in global iron ore trade talks, as what is decisive is which of the demand and supply sides held the advantageous position in the market, said Tao Dong, chief Asia economist at Credit Suisse First Boston.

As the global economy continues a growing trend and the demand for steel is still on the rise, iron ore suppliers held a favorable position in the market, he said.

The new price will definitely pose higher cost pressure on Chinese steel producers and the only way for them is to accelerate industrial reshuffling and acquisition and to improve the structure of products.

Source: Xinhua