It is reported that China Iron & Steel Association has lately responded to Vale's request for imposing a term price increase halfway through the typical annually contract cycle as breaking the convention and trade law.

Mr Zhang Jingang deputy secretary-general of CISA said that in fact, this is due to different historical base prices since Vale had given Asian and European mills a same hike this year. He said that though Vale said it is in negotiation, many Chinese steelmakers were just shelved at the ports not allowed to load the ore resources after they arrived in Brazil recently. The brazilin seller would not like to load the resource unless China agrees on price hike. He added that this is against the trade law, as the term price has already set this year.

CISA has got responses from the domestic mills on this matter it yet declined to disclose their countermeasures.

As per report, the practice is term iron ore price is only negotiated and fixed once a year between the top three mining giants and the major steel mills in the world. The 2008 fiscal year talks led to a 65% t0 71% increase for Vale and 79.88% to 96.5% hike for Rio and BHP. Currently, benchmark price of some ore varieties from Vale stands 11% to 11.5% lower in Asia than in European market.

(Source Beijing Times)