(Xinhua)
Updated: 2008-02-19 19:27

Baosteel has been negotiating on behalf of China's steel industry since December last year with major global iron ore providers, including Vale,BHP Billiton and Rio Tinto.

"The most important issue is not who gained the initial pricing power. In 2005, Japanese steelmakers gained initial pricing power, but the iron ore price rocketed 71.5 percent," said Hou, adding that this year's 65 percent iron ore price hike would definitely add to the pressure on China's iron and steel makers.

BHP Billiton announced on January 30 that it had signed a 10-year deal to supply Baosteel with an additional 94 million tons of iron ore at a price to be mutually agreed upon each year.

"The chief negotiation officer of Rio Tinto is now in Japan talking with clients and not in China negotiating with Baosteel or other Chinese steel makers now," Anthony Loo, managing director of Rio Tinto China and Rio Tinto Asia told Xinhua on Tuesday at a press conference.

The price rise of 65 percent for term iron ore price had not exceeded the spot price rise range, said Anthony Loo, adding that it was difficult for him to judge the influence of the iron ore price rise for Chinese domestic iron and steel makers.

He said the company was still optimistic about the development trend of the Chinese steel market, adding that the market will largely be decided by steelmakers' demands and bearing capacities.

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