It is reported that the China Iron & Steel Association is at odds with the nation's steelmakers over the issue of contract prices for iron ore.

As per reports, a split has occurred between China's steel industry and its representative body CISA.

The country's large steel mills are unhappy about the group's refusal to accept the iron ore price cut negotiated between Rio Tinto and other Asian customers. Baosteel is believed to oppose CISA's stance over the issue

CISA continues to reject Rio Tinto's settlement price that has been agreed by steelmakers in Japan and South Korea, although it may eventually bow to pressure from Chinese steelmakers.

An industry insider said that “CISA will be forced either to change its mind or accept a new spot market world without benchmark contracts. Privately, I believe Baosteel does not agree. There are only two possible outcomes either the benchmark or the spot market. If they refuse to take the settled benchmark, the only way out is in the spot market, and that is not what they wanted in the first place."

CISA has insisted this year on commandeering the price talks. Baosteel remains in the negotiating room but is taking a subordinate role.