On Tuesday, May 19, China Iron and Steel Association (CISA) secretary general Shan Shanghua stated that it is short-sighted for the three global iron ore mining giants to overcharge and to try to do long-term trading based on spot index-linked prices.
The CISA secretary general stated that while there will be no difference between the long-term contract price and the spot price for iron ore in China in the current year, the long-term contract price is the only acceptable one in the Chinese market.
Mr. Shan also remarked that China has continued to abide by three basic guiding principles in the international iron ore talks, namely, the cost factors of the two sides, reasonable profit margins for both, and the supply-and-demand relationship. If one party fails to make a profit from the deal then it must be unreasonable, he said, adding that the ultimate aim of the negotiations is to allow both parties achieve fair profits.
In addition, Mr. Shan withdrew his statement made to a newspaper last week to the effect that China would not accept a 30-35 percent cut in iron ore prices, going on to say that he would not be making any more such statements in the current situation. Thus, it would seem that China has changed its position somewhat.