China threatens not to use Vale ore

An official from the China Iron and Steel Association (CISA) said China may stop using iron ore from Brazilian mining company Vale if it goes through with a price rise, state media reported. CISA Vice Chairman Luo Bingsheng said at a conference in Beijing that domestic steel mills met last week to discuss the possibility of using iron ore from Brazil. Vale has sought to raise already agreed-upon contract ore prices for Asian miners to match prices paid by European buyers, prompting a complaint from the association. At the same conference, Baosteel Chairman Xu Lejiang said China’s steel output could be below 500 million tons this year due to weakened demand from the global economic downturn. The CISA had earlier projected output for 2008 at 540 million tons.