Despite China, the world's biggest iron ore importer, setting the benchmark price for ore for the first time this year, experts say suppliers still control the market.

This year's price creep, following four consecutive years of large rises, implied the leading ore miners have a firm grip on price setting.

Hundreds of Chinese buyers were forced to accept a 71.5 percent increase in the iron ore price in 2005, which was first agreed to by a Japanese mill. That was followed by a further 19 percent increase last year.

China's largest steelmaker Baosteel settled the iron ore price for 2007 with an increase of just 9.5 percent.

Luo Bingsheng, executive deputy president of the China Iron & Steel Association (CISA), said the price reflected market conditions, and China had made headway in taking the lead in negotiations for the first time.

According to the rules of the international iron ore trade, the first price agreed between a major buyer and miners is taken as the benchmark for the long-term price.

Luo said China, which accounts for nearly half of the global iron ore trade and contributes 80 percent of demand growth, should "have a say" in international prices.

"We are satisfied with Baosteel's performance in the negotiations this year," Luo said.

"The (9.5 percent) increase is acceptable as Chinese steelmakers enjoy good profits."

As China increased its proportion of long-term contracts in iron ore imports, the average import price in iron ore declined slightly last year from 2005, despite the 19 percent increase, according to statistics from the CISA and the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters.

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