China steel assn says Fortescue price is reference

BEIJING, Aug 17 - The China Iron and Steel Association (CISA) said on Monday it would negotiate with the three top iron ore miners, using the price it agreed with Australian miner Fortescue Metals Group as a reference.

Liu Zhenjiang, CISA's vice chairman, told an "emergency" news conference that the association would push for a "Chinese model" in iron ore price talks.

CISA said Chinese steel mills had agreed to prices with Fortescue Metals Group for the second half of 2009, including a 35.02 percent drop on the year for fines, and a 50.42 percent drop on the year for lumps.

The deal comes as a stalemate drags on between the Chinese steel industry, represented by CISA, and iron ore miners Rio Tinto, BHP Billiton and Vale.

Shan Shanghua, the association's Secretary General, told the conference that next year's conditions will determine whether the group will continue with half-year pricing agreements.