China may be ready to settle on iron ore pricing

The China Iron and Steel Association, negotiating on behalf of all of the country's steelmakers, has resisted pressure to accept a 33% cut to benchmark prices already agreed to by rival Japanese, South Korean and Taiwanese mills.

China instead wants a 40% price cut for the contract year commencing April 1, in recognition of reduced demand.

Spot prices posted by Metal Bulletin showed a jump to US$81 a tonne last week.

There were indications on Friday that China would agree to a smaller cut, though the association had insisted it was unfazed by the likelihood of negotiations stretching into the next financial year beginning Wednesday.

Meanwhile, a conference has heard that more than 430m tonnes of additional iron ore production capacity will be introduced between 2009 and 2011.

The United Nations Conference on Trade and Development's report, The Iron Ore Market 2008-2010, said most of the new production would come from Australia.

Separately, Barclays Capital predicted the global iron ore market would tighten over the next 12 months with prices rising 10%.