China Iron & Steel reportedly warns BHP Billiton, Rio Tinto on...

China Iron & Steel reportedly warns BHP Billiton, Rio Tinto on market demands

By MarketWatch
CANBERRA (MarketWatch) -- Zhang Xiaogang, chairman of the China Iron & Steel Association, has warned BHP Billiton Ltd.
and Rio Tinto Ltd.
against abusing their position as major iron ore suppliers by demanding damaging price rises, the Australian Financial Review reported Friday.
The companies want a 50% increase in the contract price of iron ore, which has nearly doubled since 2002, and argue that they should receive a share of the savings Chinese buyers make from buying Australian iron ore due to the cheaper cost of shipping compared with rival supplier countries, the report said.
A boom in Australia's mining industry is driven by growth of China's steel industry and "we need a cooperative partnership" during price negotiations, he said, adding that he hopes both sides take a long-term strategic approach to the issue rather than simply deal on the basis of the tight supply environment.
The price negotiations will start after China's national holidays end on Oct. 7 and would be concluded "in one month," Zhang said.