China insisted yesterday that its domestic market conditions must be taken into consideration over stalled annual contract pricing negotiations for key steel-making commodity iron ore.
"In setting the price for China's iron ore imports, negotiators must not only consider the situation in Europe, but also in Asia -- and particularly here in China," the official Xinhua news agency quoted a spokesperson from the Chinese steel association as saying.
"If the mining side fails to do this, Chinese steelmakers will find it unacceptable," the spokesperson said.
The dispatch follows a deal struck this week between Germany's largest steelmaker, ThyssenKrupp AG, and Brazil's Companhia Vale do Rio Doce -- the world's largest iron ore miner -- for a 19-percent increase this year for iron ore prices from a year ago.
Analysts have said the agreement is now likely to become the global benchmark until early next year, when the contracts will be renegotiated.
In the past Japan and sometimes Europe took the lead in negotiating annual contract pricing.
But with its economy booming, China, the world's largest consumer of iron ore, was keen to take a bigger role in the setting of raw material prices.
Baosteel, which is heading the discussions for all Chinese firms, wanted to secure the cheapest possible price from the world's three largest exporters -- Australia's Rio Tinto, Anglo-Australian miner BHP Billiton and Companhia Vale do Rio Doc.
But now ThyssenKrupp AG has stepped in ahead of it and agreed to pay much more than the 10 percent hike that Baosteel was reportedly seeking.