Hebei Iron & Steel Group, China’s second-biggest mill, denied a China Business News report that the nation’s steelmakers agreed to a 33 percent cut in contract iron ore prices.
“The iron ore price talks are still going on,” Hebei Steel’s Vice President Tian Zhiping said today in an interview. “The China Iron and Steel Association would inform us immediately if it’s going to sign the agreement, but so far we haven’t heard anything,” he said.
The China Business News report cited unidentified sources as saying China agreed to the cut, matching an accord reached by Japanese rivals and Rio Tinto Group in May. The steel association on May 31 rejected the Rio price agreement and had been seeking a reduction of as much as 45 percent.
“Rio hasn’t become more flexible,” said Tian. China agreed to a price reduction in both Pilbara Blend iron ore fines and Yandi fines of 33 percent to 97 U.S. cents per dry metric ton unit, the China Business News reported.
The mills also agreed to a reduction in Pilbara Blend lumps by 44 percent to 112 U.S. cents per dry metric ton unit, the report said. The new prices are effective from April through to October, it said.
Calls to the China Iron and Steel Association weren’t answered. Baosteel Group Corp.’s chief negotiator, Ding Shouhu, said he’s unaware of the report and declined to comment further.
Pilbara blend iron ore is a Rio Tinto product, while BHP Billiton Ltd., Australia’s second-biggest iron ore exporter, produces ore from its Yandi mine. Rio Tinto spokeswoman Leith Paganoni said the company doesn’t comment on negotiations. BHP Billiton Melbourne-based spokesman Peter Ogden declined to comment.
China also agreed to conduct negotiations on a biannual basis with talks for the second half now underway, the newspaper said.
Separately, four of Rio’s employees in Shanghai have been detained since July 5 for “unclear” reasons, the company spokesman Nick Cobban said yesterday. A Public Security Bureau official in Shanghai and the Foreign Ministry in Beijing declined to comment when contacted by Bloomberg News.