China gives ground on iron ore price demand -source

Published: 30 Jun 2009 21:42:10 PST

BEIJING, July 1 - China's steel industry is willing to accept term iron ore prices from global miners slightly below those offered to Japanese steel mills, an industry source said on Wednesday, citing officials from the country's industry group.

The comments confirmed media reports that China had softened its demands for a hefty price cut after failing to reach a deal with overseas miners by Tuesday's deadline, in the first sign of a possible compromise to salvage an annual pricing system that suppliers argue is outdated.

Citing officials of the China Iron and Steel Association (CISA) , the industry source, who declined to be named due to the sensitive topic, told Reuters that China was also willing to set term iron ore prices on a half-year basis, in an effort to hammer out a deal quickly.

The China Iron and Steel Association is representing the world's largest steel industry in negotiations of iron ore term prices with miners Rio Tinto, BHP Billiton and Vale.