DJ China Assoc: Talks With Australian Miners Likely To End Soon

June 2, 2008

June 1st (Trading Markets) – Iron ore talks between China mills and Australian miners is “likely to end soon,” Zhang Xiaogang, chairman of China Iron & Steel Association said Monday.

Zhang told reporters on the sidelines of a China International Steel Congress that, “the two sides should have the expectation that the talks will end June 30th.”

Baosteel Group Corp., China’s biggest steel maker is representing Chinese steel mills, negotiating with Australian miners to settle this year’s long-term contract prices for iron ore.

In late February, Baosteel agreed with Vale of Brazil on a 65% to 71% increase in 2008 term prices, depending on grade, after Vale reached similar agreements with Japanese and Korean mills.

But BHP Billiton Ltd. and Rio Tinto Pcl. are holding back, asking for a price increase of more than 80% to factor in the “freight premium.”

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