China steel group sees iron ore price rise next yr

BEIJING (Reuters) - China has said it expects to see a limited rise in iron ore prices in the next round of annual term talks, although it has not yet settled on prices for this year.

The China Iron and Steel Group (CISA), which sees itself as a policy coordinator but acts as the country’s top negotiator in the talks, said iron ore prices would increase on the whole but there was little room for the rise.

This is the first time the association has commented on the iron ore price trend for the next fiscal year, after months of resisting a 33 percent price cut in iron ore prices this current fiscal year that was accepted by rivals elsewhere.

CISA’s Vice Chairman Luo Bingsheng declined to comment on whether the rise would be based on the 33 percent price cut that Australian miner Rio Tinto offered, or a 35 percent cut that China agreed to with Fortescue Metals Group.

The 2010/11 iron ore price negotiations will start soon, Luo told a media briefing. An industry conference kicked off the talks unofficially last month, with analysts expecting a 10 percent rise in term prices for the next April-March fiscal year as steel production picks up.

China wants a special deal in annual iron ore price talks as the world’s biggest consumer of the steel ingredient, adding it does not have to follow prices set by other countries.

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