By staff reporter Zhang Boling

(Caijing.com.cn) Senior officials from the China Iron and Steel Association (CISA) said the organization will unify the interim iron ore import price while talks continue with major suppliers.

Luo Bingsheng, vice-director of the association, told a news conference on July 31 that all steel mills and traders that have iron ore import licenses should pay a price roughly based on what the CISA is currently bargaining for.

The CISA has been locked in negotiations with suppliers and refused to back down on the 40-percent discount it seeks on last year's contract price of about US$90 per ton.

The association said licensed importers will be allowed to charge only 3-5 percent commissions on deliveries to small mills that don't qualify for import licenses.

At present, 70 mills and 42 traders have licenses.

Some license holders have used their position to speculate in the spot market by importing ore at fixed prices under long-term contracts and selling at higher spot prices to mills that are unable to buy independently.

The unified price is intended to break down differences between spot and long-term contract prices and curb speculation, Luo said.

Luo said the association is still in talks with Vale, Rio Tinto and BHP Billiton but has also approached miners from India and South Africa regarding long-term contracts.
Shan Shaohua, secretary general of CISA, confirmed that negotiations have not yet concluded.

In a speech at the industry's annual meeting on July 30, Shan, a key member of the negotiation team, said once the contract price is settled, it will be the benchmark for all mills, regardless of size or scale.

He said China should have greater influence in the global iron ore market, since the country takes up more than half of global iron ore exports.

China produced 267 million tons of crude steel in the first six months, up 1.23 percent from a year earlier, against a 21-percent drop in other major steel-producing nations.

1 yuan = 14 U.S.cents