AFP
China said on Tuesday it will support domestic steel mills in their fraught talks with global miners on iron ore prices, after industry leaders reportedly appealed to Beijing for help.
"As the world's largest iron ore consumer, the interests of Chinese steel mills should be reflected in the negotiations," commerce ministry spokesman Yao Jian told reporters.
The steel mills wanted to maintain the "long-term contract price mechanism" to avoid large fluctuations in prices, he said.
Yao did not say how Beijing would support the steel mills in the negotiations, aimed at striking annual contracts with Anglo-Australian mining giants BHP Billiton and Rio Tinto, and Brazil's Vale.
State media reported at the weekend that more than 10 top domestic steel mills had asked Premier Wen Jiabao to make the iron ore benchmark price talks "a matter of national importance".
Steel industry leaders have warned the government they cannot agree to the 90 per cent price hikes demanded by the miners and that such a rise could hurt national interests, the China Securities Journal reported.
"The domestic steel companies can no longer bear such high quotes of iron ore and have been forced to hike steel prices to pass on the costs," an unnamed source told the newspaper.
"Raising the solution of the iron ore imports issue to the national level can avoid internal friction and protect the overall interest of China's steel industry," it added.
Australia on Monday urged China to stay out of the negotiating process and gave assurances that it would not get involved.
