It is reported from China Metallurgical News that recently Q2 economic climate index has been released by www.ce.cn and National Bureau of Statistics of China posting at a lower level.

Mr Lixinchuang executive VP of CMIPRI said that the small and medium sized steel enterprises presented a better performance than the large ones this year.

Mr Li said these 10 industrial indices, like steel output, price index, export volume, sales revenue, tax incomes and profits etc entirely reflected a lower level in large and medium steel enterprises.

Mr Li revealed that the top 10 profitable enterprises were almost medium and small sized steel enterprises during January to May this year.

The CISA surveyed 71 large and medium sized steelmakers eyed an output reduction of 3% in half year period, but a 20% growth for the outsider enterprises.

It is reported from a domestic newspaper on Friday that the CISA (China Iron and Steel Association) is looking to sign long-term iron ore deals with suppliers outside Australia and Brazil as talks with major miners stay deadlocked.

CISA, China’s chief negotiator in the protracted price talks with Australia’s Rio Tinto and BHP Billiton and Vale of Brazil, is pushing for long-term agreements with miners in India, South Africa and Vietnam, the 21st Century Business Herald said, citing unidentified sources.

More than a month after the traditional June 30 deadline, no breakthrough in the benchmark price talks is yet evident, but smaller Australian miners have already pointed the way forward by striking more flexible agreements with their Chinese customers.

Atlas Mining Ltd said this week it had agreed prices that are based on a negotiated benchmark but can be adjusted should the spot market price rise above or below a certain level.

China, whose steel mills are struggling with overcapacity, has been holding out for a price cut of 40-45 percent, even though Japanese and Korean steelmakers have signed off on a 33 percent reduction.

It is said from CISA last week that it would continue to hold out for a “reasonable” price cut.

It is reported that China (its major ports), the world’s biggest iron ore buyer unloaded 35 percent more of the steelmaking ingredient last month from a year ago.

Ships unloaded 56.5 million metric tons of iron ore in July at major ports, the Ministry of Transport said on its Web site. The ministry didn’t provide comparative figures.

Crude steel output in China jumped to a record in the first half and cash iron ore prices have gained 33 percent this year as a $585 billion stimulus by the government improves building demand and auto purchases. The China Iron & Steel Association has blamed traders for the rising imports, which have hurt its ability to negotiate for lower contract prices.

“The increase in iron ore imports in July was partly boosted by small steelmakers buying ore at lower spot prices,” said Roslyn Ji, an analyst at Core Pacific-Yamaichi International Holding in Beijing.

Spot iron ore prices traded at $95.30 a ton yesterday according to the Steel Index. They averaged $83.436 a ton in July. Chinese steelmakers are stalled in talks to agree on benchmark contract prices with suppliers Rio Tinto Group, BHP Billiton Ltd. and Vale SA. The mills buy ore from mines in Australia, Brazil and India.

Record ImportsIron ore imports hit a record 57 million tons in April, according to general customs. Imports by traders accounted for 44 percent of purchases in the first half, the steel association said last week, compared with 30 percent a year earlier.

“In the second half, China may cut its reliance on imports because higher prices may prompt mills to use domestic ore,” said Umetal Research Institute analyst Du Wei.

Container volumes handled by major Chinese ports fell 3.8 percent to 10.1 million 20-foot standard containers, the transport ministry also said today. That’s the lowest level of decline this year.

“China container traffic, relying mostly on exports to the U.S. and Europe, still needs time for a full recovery,” said Core Pacific-Yamaichi’s Ji.

Former Federal Reserve Chairman Alan Greenspan said Aug. 2 that U.S. economic growth may resume at a rate faster than most economists forecast.

It is also said from the ministry that total cargo volumes at the ports rose 13 percent to 500 million metric tons in July from a year ago.

According to Luo Bingsheng, executive vice president of the association, China Iron and Steel Association (CISA) will push forward the iron ore import registration system, as an effort to curb the flow of imported iron ores to high polluting enterprises with backward production capacity.

The association’s latest data show that China imported 297 million tons of iron ores during the first half of 2009, up 29.3 percent from a year earlier. Those imported by trading companies reached 131 million tons, accounting for 43.96 percent of the total iron ore imports, higher than 29.83 percent during the first half of 2008.

China has 112 companies qualified for importing iron ores, but actually 152 companies were engaged in such business, according to the association.

According to statistics released by the National Bureau of Statistics, iron ores used in pig iron production increased 21.55 million tons during the year’s first half, while iron ore imports rose by 67.33 million tons. Obviously, the imports were highly above production demand, which led to large iron ore inventory in ports and high demurrage charges and ocean freight.

The large iron ore imports by trading companies has resulted in over imports and distorted the relationship between domestic iron ore supply and demand, and it was disturbing for the on-going iron ore price negotiation.

Luo said that China would strictly implement the iron ore import agency system. At the same time, it would adopt a uniform price in accordance with the negotiation results, to avoid the risk of speculation on different prices for one product.

Luo called on the government to encourage domestic iron ore exploitation, to ensure supply to the domestic market.

As for the highly concerned iron ore price negotiation, Luo said that it was still in progress.

Companhia Vale do Rio Doce, Brazil’s leading metals and mining company, said last Friday that it would not reach any price agreement with China before completion of price negotiation between China and Australia’s BHP Billiton Ltd. and Rio Tinto.

It is announced from BHP Billiton last week that it has reached an annual contract price with clients on 23 percent of its iron ores and a mixed contract price on 30 percent of its iron ores, leaving the rest 47 percent still under price negotiation.

It is reported on Monday that a Chinese senior official defended Beijing’s handling of the industrial spying case against an Australian executive for mining giant Rio Tinto, and urged Australia to respect China’s court processes.

Liu Jieyu, the deputy director of the Foreign Ministry’s international department, said the alleged actions of Chinese-born Australian Stern Hu would have been illegal in Australia too, and that critics should wait for the facts to come to light.

Hu, who heads mining giant Rio Tinto’s Chinese iron ore business, was detained with three Chinese co-workers in Shanghai on July 5 during contentious iron ore price talks. State media say they are accused of bribing Chinese steel company employees to get information on China’s negotiating stance.

Few other details have been made public, and the case has become politically charged. Australian government complaints that it is not getting enough direct information on the case from Beijing have fueled fears that Hu may not get a fair trial.

“The facts of the case would constitute a violation of Australian laws were the facts (to) happen here in Australia,” Liu told the Australian Broadcasting Corp. in an interview aired Monday. Liu, who gave the interview during a visit to Australia, did not offer any further details.

“We are dealing with a violation of the Chinese law and in all legal proceedings in different countries there are different provisions about what can be released at what point of time,” he said. “It is not up to me … to say what the law requires and what the law permits.”

He said Beijing expected foreign countries to respect China’s judicial system, adding that “the Chinese government respects the independence of the Australian judicial system, I think we would expect the same from other countries.”

At last, it is said that by dealing with this case, we are really establishing or we are really trying to establish a good environment for all companies in China – foreign companies operating in China and local Chinese companies.

It is determined that CHINA wants all of the country’s steel makers to accept a single ore import price once the price for this year.

The measure aims to regulate excess iron ore imports by small steel makers and intermediary traders, which have hampered ore negotiations by creating unnecessary demand.

The China Iron and Steel Association has proposed an import system to force traders and mills to buy ore at a unified benchmark price agreed with foreign miners, and traders could charge a 3-to-5-percent fee for resale, Luo Bingsheng, vice chairman of the CISA, said yesterday.

The steel industry group said foreign miners are encouraging spot sales to China, leading to excess imports and distorting China’s actual demand. Spot imports account for 83 percent of China’s ore purchase so far this year, it said. The country’s iron ore imports surged 29 percent in the first half, mainly driven by speculative buying from smaller mills and trading companies in recent months.

China’s negotiation position has been hurt by rising spot ore prices, which were below contract prices in May when Japan first accepted the 33-percent cut but have now exceeded them.

The CISA also expects a “reasonable” solution in the protracted iron ore price negotiations with global miners while it blamed speculative trading for hindering the talks.

“We hope to see a reasonable result,” Luo said at a press briefing yesterday in Beijing, adding China is seeking a win-win agreement.

The CISA, China’s lead negotiator this year, is locked in the talks as it demands a deeper cut in term prices after major Japanese and South Korean steel mills accepted a 33-percent reduction offered by Australia’s Rio Tinto, the world’s second-largest iron ore miner.

The talks, originally meant to set prices for the year starting April, had missed a key June 30 deadline, with some Chinese mills already agreeing to a temporary 33-percent cut.

BHP Billiton, the world’s No. 3 ore producer, this week said it has agreed to sell 30 percent of its volume for this year on a combination of quarterly negotiated pricing, spot market and index-based pricing, but only settled 23 percent of volume at annual contract prices.

It is reported on Monday that Chinese steel mills’ profit in July is expected to exceed 20 billion yuan (2.93 billion U.S. dollars), as the monthly growth of steel prices rose to an eight-year high.

Steel prices jumped in July, prompting profit in steel enterprises to expand, according to Xu Xiangchun, chief analyst with industry information provider MySteel.com.

The benchmark index of MySteel.com. for domestic steel prices rose 11.9 percent in the month.

Net profits in hot-rolled coil and cold-rolled coil are estimated to stand at 600 yuan and 1,400 yuan per tonne, as their prices gained by 376 yuan and 473 yuan per tonne in July, respectively, said Xu.

Full-year profit of China’s steel makers will reach 100 billion yuan if steel price remains stable in the second half, said Xu.

A revival in demand and the government’s continuous economic stimulus will help stabilize the steel prices, said Qi Xiangdong, vice secretary-general of the China Iron and Steel Association (CISA).

Profit in China’s 71 major steel enterprises totalled 3.55 billion yuan in June, expanding from May when they turned profitable after seven-month losses.

According to the CISA, The aggregate net profit of China’s major steel producers fell 43 percent to 84.6 billion yuan last year on weak demand amid the global financial crises.