| PERTH, Oct 18 (Reuters) - Sinosteel Corp., China's largest iron ore importer, said on Tuesday it believed iron ore prices should fall by 5 to 10 percent in 2006, as talks begin to set a benchmark price with major miners. Huang Tianwen, president of state-owned Sinosteel, said a small decrease in price would benefit iron ore suppliers such as BHP Billiton Ltd./Plc. and Rio Tinto Ltd./Plc. in the long term, after iron ore prices surged 71.5 percent in 2005, driven by Chinese demand for steel. "In this kind of situation the price should be coming down by 5 or 10 percent on 2005," Huang told Reuters after signing an agreement with Midwest Corp. Ltd. for a joint venture study into a Af1.5 billion (f1.1 billion) mine and processing development. "We try our best to ask and convey to the iron ore suppliers to decrease a little bit the iron ore price from next year," Huang said earlier, although he acknowledged that miners would be looking for a further price rise. Iron ore imports by China are expected to hit 240 million tonnes for 2005, including 34 million tonnes of spot iron ore stockpiled before the price rise. Japanese steel mills currently set prices in annual iron ore talks with Australian miners, principally BHP and Rio Tinto, and Brazilian suppliers, mainly Companhia Vale do Rio Doce (CVRD) . However, China's steel makers said in April they want a bigger role in iron ore negotiations after being unpleasantly surprised by the 71.5 percent price surge. The new price talks are for the year beginning April 1, 2006. (f1=Af1.33) |
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