Bloomberg quoted Michelle Applebaum Research Inc said steelmakers in China, the biggest iron ore consumer, should pay a premium because of the risks of doing business there and their need to secure supply.

According to an e-mail report sent by Mr Dave Uhryniak an analyst with the US based researcher said “As the largest buyer, they have to a pay premium to get size tonnage. The conviction of four Rio Tinto Group iron ore employees in China highlights the increased risk of doing business and should translate into a higher price.”

The report said “Chinese iron ore prices will settle at least as high, if not higher than other Asian players.”

Chinese steelmakers last year rejected a 33% price cut offered by iron ore producer Rio Tinto Group as insufficient, and said they wanted to set a price separate from the rest of the world as the biggest buyer. The failure of talks led to the end of a 40 year annual pricing tradition.

(Sourced from Bloomberg)