BEIJING, Feb.23 -- Baosteel Group, parent of Baoshan Iron and Steel Co., has failed to reach an agreement with major iron ore suppliers on 2006 prices even after the third round of term contract negotiations held recently, a Baosteel official said yesterday.
"The third round of talks (have) finished. Both parties' points of view on pricing had huge differences," said the official, who participated in the talks.
"Miners insisted on raising prices further while we insisted on cutting. We didn't get any chance to (go over) detailed figures because both parties are expecting opposite price directions," he added, speaking on condition of anonymity.
Baosteel Group, China's largest steelmaker, has been representing other domestic steelmakers in talks with major miners such as Australia's BHP Billiton Ltd., Rio Tinto Group and Brazil's Companhia Vale do Rio Doce, or CVRD, since late last year to set 2006 iron ore prices.
New one-year term contracts are due for renewal from Apr. 1.
"We certainly hope to settle everything before the new contract year begins, but it (the start of the new contract year) shouldn't be regarded as a deadline (for the conclusion of negotiations)," said the Baosteel official.
Last year, domestic companies agreed to a sharp 71.5 percent rise in iron ore prices annually. Early reports have suggested mining companies are looking for a further 20 percent increase this year, given China's huge steel production capacities.
However, local analysts have said domestic steelmakers are unlikely to accept a rise of more than 10 percent in prices under the 2006 term contract negotiations.
Iron ore imported by China under the one-year term contract was priced at US$41 to US$42 a metric ton last year, free on board.
This year's prices will likely be around US$45 per ton, free on board, according to Chinese analysts.