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China's Steelmakers Reject Iron Ore Price Increases

An emergency meeting of major Chinese steelmakers May 19 rejected a sharp increase in iron ore prices agreed to by Japanese and European steel groups and insisted that negotiations continue.

Chief executives from 16 major Chinese steel companies attended the crunch talks to decide how to handle their negotiations with the world's three biggest iron ore producers.

Chinese steelmakers struck out at European and Japanese groups' decision to move ahead of China and negotiate benchmark prices on annual iron ore contracts this week, saying that their interests had not been upheld.

"The mining interests must take into consideration the long-term benefits of both parties and pursue a win-win solution," said a tersely worded statement issued by the China Iron and Steel Industry Association.

"A few enterprises have not followed the principles of the negotiations, which aim to pressure Chinese steel enterprises and we are resolutely opposed," it said.

The emergency talks came in response to agreements by Japanese and European steelmakers this week to pay 19% more for iron ore this year.

Copyright Agence France-Presse, 2006

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