INTERFAX-CHINA reported that China Iron and Steel Association is against Rio Tinto's recent move to cut long term iron ore shipments to Chinese steel mills by 10%.

Mr Luo Bingsheng secretary general of CISA said that Chinese steel mills recently received written notices from Rio Tinto stating that, in accordance with contract stipulations, iron ore shipments under current long term contracts will be cut by 10% due to a force majeure.

He said that "According to our investigations, some iron ore miners have cut iron ore shipments to Chinese steel mills to under 90% of contracted amounts under this term's prices. We firmly oppose such a move and will take appropriate response measures.”

Mr Luo said that iron ore suppliers should live up to their commitments to Chinese steel mills and stick to international iron ore trading practices.

Mr Du Wei and analyst with Umetal told that regardless of whether Rio Tinto's move is the result of a force majeure or simply a ploy intended to pressure Chinese steel mills in the current iron ore price negotiations, supply to China's domestic iron ore market will tighten as a result. He said "Rio is increasing spot iron ore sales to Chinese customers to make up for the 10% cut from long term contracted supplies. However, the CIF spot prices it is offering at present are not particularly attractive to Chinese steel mills.”