China's influential Caijing Magazine reported China Iron and Steel Association general secretary Mr Shan Shanghua denied media reports that Chinese steel makers would accept a drop of only 33% in iron ore term prices as agreed to with miners by Asian steelmakers Nippon Steel, JFE Holdings Inc and POSCO.

CISA, the de facto negotiator leading Chinese steel mills in iron ore price talks this year, has insisted on price cuts of at least 40%.

Mr Shan was quoted as saying that China's demands in the 2009/10 iron ore negotiations were very clear, calling for an accurate reflection of changes in supply and demand conditions this year in the international iron ore market, where the global economic slump has softened demand.

He said that "We absolutely will not accept a 33% price cut.”

He said that "Iron ore term prices would be higher than last year under the 33% price cut agreed to by Nippon Steel and the Australians, as the Australian dollar depreciated 35%.”

Mr Shan added that Chinese steelmakers in CISA had no right to negotiate iron ore prices individually with overseas miners and that any separate agreements reached with miners would be invalid, as Baosteel was the only steel mill authorized by CISA to participate in talks on behalf of Chinese firms.

The report added that Steel Business Briefing had reported on Friday, citing unnamed sources, that CISA and Baosteel, China's largest steelmaker, had agreed internally to accept terms similar to those already struck with other Asian mills.

(Sourced from Reuters)