According to Mr Luo Bingsheng vice chairman of the China Iron and Steel Association, imported iron ore price cut is the development trend. China's steel mills are still in talks with overseas iron ore miners on long-term supply in 2009-10 fiscal year and are aiming to get prices back to 2007 levels.

Mr Luo said, even stalemate is not the way to tackle the problem, but failed talk works much more against miners. He said that global iron ore will be sharply oversupplied this year and import in Japan and South Korea will slump. Especially in Japan, the drop would hit over 30% leaving China the only country to keep importing in large now.

He added that current sport price stands much lower than long term price and miners' quotation. If China consults Japan's way to price in the talk, it will lift the spot price and push mills in loss.

Mr Luo thought government should improve export conditions of steel products and implement flexible export duty policies. He also disclosed that CISA has already proposed suggestions to government to hedge out risks in sliding export. The proposal includes tariff rate adjustment and the other regulations.

This target is in keeping with China steelmakers demand to reduce over 40% of iron ore benchmark price in the contract. But analysts viewed more pressure on China's steelmakers in the impasse, as mills in the other Asian counties have already agreed with Australia miners.

(Source: China Securities Journal)