Mr Shan Shanghua secretary general of China Iron & Steel Association, in response to reports that Rio would walk away from contracts if an agreement isn't reached on a price for iron ore soon, China would still like to chase a 40% cut in iron ore benchmark price and would never make a concession.
Mr Shan disclosed imported iron ore stockpiles at Chinese ports have amounted to over 70 million tonnes and domestic miners could provide 50% of total iron ore needed.
He said that "We can stop importing ores, but Vale, Rio and BHP can not stop exporting ores. He said that it is buyer's market now. Mine giants have gained huge profits in the past years and it is time for them to make compromises.”
Mr Luo Bingsheng vice chairman of CISA had earlier said that if the price cut fails to satisfy Chinese steelmakers, China will not accept the benchmark price even if other buyers have agreed.
Mr Xu Xiangchun senior analyst with Mysteel said "Rio sends out the reports unofficially, indicating that it tries to deliver some pressure to the price talk. He said that it would be bad news for both Chinese steelmakers and mine giants if the price talk breaks down. Chinese steelmakers will lose steady iron ore supply, leaving only domestic ores with lower grades and qualities, while giants such as Rio will face greater sales risks.
Mr Sam Walsh the head of Rio Tinto iron ore operations has announced that Rio would not accept the 40% price cut proposed by China side. Walsh suggested clauses in some of the company's contracts would allow them to be terminated if no agreement was reached by June 30th. Analysts believe Rio will sell iron ore on spot market if there is no agreement by June 30th.