Xinhua news agency reported that the China Iron and Steel Association is drawing up new rules that will force all Chinese mills to accept a single unified iron ore price,

Mr Shan Shanghua secretary general of CISA is reported to have outlined three basic principles
1. Continuing contract price negotiations with foreign miners
2. Establishing a unified price system
3. Changing the chaotic domestic iron ore market situation

Mr Shan was quoted as saying that "We are striving to establish a new form of Chinese iron ore imports.”

A number of local mills and iron ore traders have been accused of artificially inflating demand for foreign iron ore, thereby undermining the country's negotiating position. Recently the biggest difficulty has been small and medium sized steel mills and traders importing excessive amounts of iron ore. Some have even gone against CISA's express orders by signing secret individual deals with the ore suppliers.

CISA believes a single, unified price, coupled with restrictions on the right to import, will help resolve the issue. Mr Shan said that "As soon as 2009 prices are settled, it will become China's unified import market price, and it doesn't matter if it is a large or small mill, a state operated or private steel enterprise, it will have to obey that single price.”

(Sourced from Reuters)