Small iron and steel producers in China have been blamed for the country's failed negotiations with the world's major iron ore suppliers last month.

The large amounts of iron ore stockpiled at China's ports by the small firms prior to the start of the talks had a negative effect on negotiations, Liu Ronghua, a senior research fellow with the Tianma Future Research Center told Xinhua.

Liu estimated the amount of iron ore stockpiled at the ports by these firms to be 24.8 million tons.

The small firms, which did not join the industry's union led by the country's largest steel producer Baosteel Group, could not consume such a huge amount of iron ore, he said.

They imported the goods in large quantities prior to the price hike and stored the goods at ports at a low cost.

Currently, there are around 40 million tons of iron ore stockpiled at ports nationwide.

Besides, Liu said there was no future iron and steel market in China. This was another factor leading to the failed negotiations, which began last October.

Baosteel Group, which was representing other major Chinese steelmakers at the negotiations, agreed to a 19 percent price hike with Australia's BHP Billiton Ltd on June 20.

Liu said the price surge would mean that China needs to spend an extra 10 billion yuan (1.25 billion U.S. dollars) this year on importing 148 million tons of iron ore.

The country had already spent additional 40 billion yuan on imports of iron ore as a result of a 71.5 percent price rise for the goods in 2005.

China's booming economy, which grew about 10 percent in each of the past three years, needs to be fueled by large amounts of raw materials, such as iron ore.

Source: Xinhua