guess how low it can go., page-173

FYI... China's steel industry is trying to roll back the calendar to 1994.

http://www.forbes.com/markets/2008/12/08/china-iron-steel-markets-equity-cx_ra_1208markets29.html

China: Cheaper Iron Ore Else
Ruthie Ackerman, 12.08.08, 03:45 PM EST

With steel prices plunging, Beijing smelters want their raw materials to decline as well.

China's steel industry is trying to roll back the calendar to 1994.

On Monday China began informal negotiations with iron ore producers Companhia Vale do Rio Doce (nyse: RIO - news - people ), BHP Billiton (nyse: BBL - news - people ) and Rio Tinto (nyse: RTP - news - people ), pressuring the companies to accept hefty price cuts. China wants to pay iron ore prices that are in line with what it will get for the steel into which it turns the metal.

“Steel prices have fallen to 1994 levels, so why shouldn't iron ore prices do the same?” asked Shan Shanghua, secretary-general of the China Iron and Steel Association. “We will definitely be asking for a decrease, and it won't be small.”

Relations between China and Vale have been testy since the miner tried to renegotiate its annual contract this year to equalize what it charged in Asia and Europe. (See "China Fights Iron Ore Price Hike." )

In 1994 iron ore prices were approximately a quarter of what they are today. Benchmark contract iron ore fines, which are the most heavily traded type of ore, cost around $90.60 a metric ton as of late October. In 1994 a metric ton cost $24.40. The metal soared in recent years as the world economy expanded and China's growth soared, but in the past few months, the global financial crisis sent many commodities, iron among them, plunging.

Around November each year, each of the three big iron-ore miners holds closed-door talks with the world's main steel-producing regions, each of which is represented by a single steelmaker, to negotiate a single contract price. (See “Japan Steelmakers Agree To Iron Ore Price Hikes.”) Price negotiations have been a sore spot between China and its iron suppliers, with wrangling beginning as soon as the previous year’s negotiations have concluded. China is the world's biggest steel producer and consumer.

When one of the miner's strikes an agreement with a steelmaker it is typically adopted by the other two.