Reuters reported that Chinese steelmakers are expected to accept a 2009 benchmark iron price cut of around 33% despite calls in China for bigger reductions.

Mr David Flanagan MD of Atlas said that "It's looking increasingly likely that the number is going to be closer to 33 percent."

Mr Flanagan also said that Rio's withdrawal from a USD 19.5 billion tie-up with China's Chinalco, in favor of a deal with BHP Billiton is putting other Australian iron ore mining companies in the sights of Chinese investors.

He said that "Now more than ever, Chinese customers are going to be looking to support new entrants, therefore growth and expansion plans are more likely to be met."

Steelmakers in Japan and South Korea are concluding their annual pricing talks by agreeing to a 33% cut with Rio Tinto and 28% with Brazil's Vale.

China, the world's largest steel producer has been holding out for a minimum 40% cut, toughening its position on last Thursday by threatening to walk away from talks and reduce steel output.

(Sourced from Reuters)