The China Iron and Steel Association (CISA) has issued a short three-point statement on its website regarding the deal reached last week between Australian mining giant Rio Tinto and Japanese steelmaker Nippon Steel for a 32.95 percent cut in the fine ore price and a 44.47 percent drop in the lump ore price for the 2009 fiscal year. The statement reads as follows:
1. The said price cuts do not objectively reflect the actual conditions in the international iron ore market;
2. The said price cuts will result in overall losses among Chinese steelmakers;
3. The prices do not reflect a mutually beneficial, win-win relationship between steelmakers and iron ore suppliers.
Therefore, the CISA says in its statement, the Chinese steelmakers cannot accept these prices and will not follow them.