China left out of iron ore negotiations

Major miners Rio Tinto, Vale and BHP Billiton are conducting iron ore price negotiations without consultation with China, the Financial Times reported. Sources close to the negotiations said the miners intended to reach an agreement first with Japanese steel mills, which would then be presented to China with little room for further negotiation. China’s negotiators have reportedly encountered internal disputes between steel mills and the China Iron & Steel Association over contract prices. China was unable to come to an iron ore agreement with global miners last year, forcing steel producers to resort to more expensive spot-market purchasing. China alone accounts for more than 50% of seaborne iron ore demand.