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Iron ore price negotiations - Big 3 urged to reconsider mechanism
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Monday, 19 Jul 2010

According to Mr Xu Lejiang Chairman of Baosteel the steelmaker is in talks with mining companies and hopes to achieve a win-win conclusion. He said imports by China the biggest buyer may equal last year's level at best and may fall.

He said that "The supply and demand for iron ore has changed as prices fall. This must prompt the suppliers to rethink ore pricing. We hope to reach a pricing system that's sustainable over the long term."

Mr Xu said steel demand from carmakers will slow in the second half from the first six months, signaling a decline in the world biggest metal market will continue.

He said that growth in auto production may be as low as 15% this year. Sales of cars, buses and trucks in China gained 48% in the first half of the year.

The cost of 62% iron ore delivered to Tianjin port dropped for a 16th straight day to USD 117.60 a tonne on July 13th. That is down 37% from the April 21 price of USD 186.50, the highest since data from the Steel Index was compiled on Bloomberg from November 2008.

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