People's Daily Online reported that China's Ministry of Commerce hopes to maintain the current iron ore long term pricing negotiation mechanism and will provide support to Chinese steel mills when necessary.
Mr Yao Jian spokesman of MOFCOM said on March 16 that “China should play an important role in the iron ore pricing mechanism and China's interests should be represented in the negotiations.”
He announced that “The MOFCOM will provide support to the China Iron and Steel Association and Chinese steel producers, including means of trade policies.”
Mr Yao, however, did not disclose what kind of policies will be adopted to support the steel producers. He said “Before the price is decided, it’s hard to say what measures will be taken, but we do have policies in reserve.”
He also noted that the ministry hopes that iron ore suppliers and steel mills worldwide join hands in maintaining the long contract pricing mechanism, in order to avoid violent fluctuations of iron ore prices.
The three iron ore giants, namely BHP Billiton, Rio Tinto and Vale, are demanding a price hike of 80% to 90%, far beyond Chinese steel producers' expectations and talks have reportedly broken down over the size of a proposed price increase in iron ore supplies.