One of the key players in the current iron ore trade negotiations, Companhia Vale do Rio Doce (CVRD), has denied media reports that a consensus has been reached on a five-to-ten percent price floating band.

Roger Agnelli, CVRD's Chief Executive Officer, said the negotiation is unfolding, and the price will be decided on the basis of market supply and demand.

He said participants have exchanged their data and expect to make compromises that will benefit all parties.

Analysts said it is too early to conclude on a five to ten percent fluctuation.

Before the talks kicked off Monday, it was widely believed that iron ore prices would increase by less than ten percent in 2007, contrasting with last year's hefty 19 percent price hike.

Morgan Stanley predicted that given continuing robust demand, prices would rise again in 2007.

Insiders disclosed that Chinese industry heavyweight Bao Steel has been given more flexibility and freedom in the negotiations by government and industry associations.

CVRD is expected to produce 300 million tons of iron ore in 2007, a rise of 13.5 percent on 2006. The increased output will all be sold to China.

Source: Xinhua