Chinese steel mills have been told they can break rank by signing separate iron ore agreements with the world's top three miners as collective price talks drag on, state media said Thursday.
The move marks the first time the China Iron and Steel Association has allowed its members to negotiate directly with iron ore miners before a nationwide benchmark price agreement was in place, the China Daily reported.
"Considering the operating pressure and difficulties of steel makers, they can now talk with the big three miners and buy iron ore at provisional prices under CISA's regulations," Luo Bingsheng, vice chairman of the industry group, was quoted as saying.
Despite allowing Chinese steel mills to sign separate purchasing agreements with Australia's Rio Tinto and BHP Billiton and Brazil's Vale, Luo insisted long-term contract price negotiations were still under way.
"(The three miners) offer a price we don't accept, that doesn't mean the end of negotiations. The price talks are still ongoing," Luo said.
A number of unnamed firms have already signed deals, the report said.
Early this month, the CISA urged steel makers to stop buying iron ore from Rio, BHP and Vale in protest at an alleged price monopoly after the miners said they had abandoned annual contracts in favour of a short-term pricing system.
China is the world's largest importer of iron ore and the industry group wants to maintain the long-term contract price system to avoid large price fluctuations.
According to reports, Asian steelmakers such as Japan's Nippon Steel and South Korea's Posco have already accepted massive hikes in iron ore prices this year of up to 90 percent.
Agreements by the Asian steelmakers in the iron ore talks have previously served as a benchmark in global negotiations.
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