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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (36042)	4/24/2009 4:27:50 PM
From: LoneClone	Read Replies (1) \| Respond to of 193686

China's Ansteel says iron-ore talks at impasse miningweekly.com By: Reuters 23rd April 2009 PERTH - Annual iron ore price negotiations between steelmakers and miners are at an impasse, with China's entire steel industry running at a loss this month, Anshan Iron and Steel Group Corp (Ansteel), China's No. 2 steel maker, said on Thursday. "Starting in April, no steelmakers in China are making a profit," Ansteel President Zhang Xiaogang told a press conference. Zhang said to date steelmakers worldwide had been unable to reach a consensus on how much to pay for ore due to varying market conditions in different countries, with no "material result" to date. Negotiators on both sides had hoped to wrap up talks ahead of the start to the April 1 shipping year and now must backdate shipments once a settlement is reached. In China, home to the world's largest steel industry, demand for steel products is waning due to the global financial crisis, with conditions worsening, Zhang said. "We hope iron ore producers can work together with steel mills during these very difficult times," Zhang said. Miners are locked in talks with mills to settle contract prices of iron ore for the new fiscal year started this month. Prices of Australian iron ore fines were agreed around $91 a tonne last year, while spot prices are now quoted some 30 percent cheaper at about $64 a tonne. "Many Chinese steel mills are bargaining spot iron ore prices with suppliers in accordance with current steel prices now," Jiang Qiu, an analyst at Guotai & Junan Securities in Shanghai, said. The main negotiators for the iron ore sector, the largest miners, Vale, Rio Tinto and BHP Billiton, are bracing for a contraction in prices for the first time in more than half a decade. Analysts are predicting a fall of up to 40 percent. Rio's head of iron, Sam Walsh, has predicted prices would fall, but by less than 50 percent. Andrew Simpson, chairman of Australian miner Territory Resources Ltd, told Reuters Television a roll back of 35 percent was "fair" given the outlook for steel this year. "Territory is too small to participate in the negotiations but would have to adhere to any settlement price," he said. Zhang's comments show a bleaker outlook for the steel sector than previously believed. Less than half of China's major steel mills operated in the red in March, official newspapers in China quoted a senior industry executive as saying on Thursday, as oversupply in the country weighed on product prices. Losses were expected to expand in early April as steel prices continued to fall, Wu Xichun, honorary chairman of China Iron and Steel Association, was quoted in the China Securities Journal and the Shanghai Securities News. Large- and medium-sized steel mills in China saw a combined net loss of 1.91 billion yuan ($279.7 million), while 33 mills suffered losses, Wu told an industry meeting on Wednesday. China may have oversupply of more than 100 million tonnes of crude steel this year, the Xinhua news agency quoted Zhu Hongren, an official from the Ministry of Industry and Information Technology, as saying on Thursday.