Iron ore price negotiators from iron ore majors like BHP, Rio and CVRD will soon begin formal contract talks with Japanese steel mills in Tokyo, but this year's outcome will not be E decided in Tokyo but in Beijing and Shanghai.
Amid continued strong demand and high spot prices, the miners are gunning for another annual price rise on top of February's massive 71.5% hike. But it is the Chinese steel mills that have made the early rhetorical riposte, arguing that prices need to fall back.

China's soaring steel production has seen it overtake Japan as the world's biggest iron ore importer. And while it’s booming economy was the main driver of last year's price rise, it was still shocked at the extent of the increase, agreed to between the Japanese and Brazil's CVRD that set the market benchmark.

Now, led by Ms Xie Qihua, chairwoman of Baosteel, the Chinese industry plans to present a united front to the miners and leverage its status as the world's largest iron ore growth market to apply the pressure.

Some centre on CVRD seeking a 20 per cent hike, or even 40 per cent, partly as compensation for its fast appreciating currency. Brazil's real has risen about 20 per cent against the US dollar this year, raising its costs and reducing revenues from US-dollar sales.

Despite pressure from the Chinese steel mills in the face of falling steel prices, Indian spot suppliers are maintaining prices at around $US55 a tonne or $US65 after freight costs. Australian contract ore sells at around $US50 a tonne after freight.

Analysts have upgraded iron ore price forecasts, tipping a 5-10% rise; some foresee a 20% climb.