industry sources say chinese cave in to price incr, page-6

its official. china accepts 19 per cent ore rise. This story is from our news.com.au network Source: Reuters

China accepts 19pc ore rise
From correspondents in Beijing
May 30, 2006
CHINESE steel mills had decided to accept a 19 per cent price rise for iron ore, putting an end to months of negotiations with the world's top miners, including Brazil's CVRD, industry sources said overnight.
The sources said the decision came after a Beijing meeting of the country's top 16 mills, headed by Baosteel Group.

This would put Chinese mills in line with top steel makers around the world, including Arcelor and South Korea's POSCO, which have already accepted the 19 percent price rise first settled by ThyssenKrupp AG.

No comment was immediately available from Baosteel, which headed the negotiations with the miners, Companhia Vale do Rio Doce, (CVRD), Rio Tinto (rio.ASX:Quote,News) and BHP Billiton (bhp.ASX:Quote,News), thw world's biggest miner.

CVRD officials were also not immediately available to comment.

Last year iron ore miners won a 71.5 per cent price rise on the back of growing demand for ore to keep pace with China's expanding steel making sector.

The Chinese industry had held off on accepting the price, even as other Asian and European steelmakers fell into line.

China, the world's top importer of iron ore, had claimed the right to lead negotiations and resented that smaller mills had set the prices.

The profits of Chinese mills have been squeezed in part due to fierce competition among mills that are fighting for survival following rapid expansion.

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