It is reported that annual iron ore price negotiations are “definitely not over,” a negotiator for the China Iron and Steel Association told the Caijing financial news organisation. However, it acknowledged that some mills had agreed to a 33 percent cut as reported earlier.

Reuters reported on Wednesday that in the absence of a formal settlement between the Chinese steel industry and iron ore suppliers Rio Tinto and BHP Billiton, major Chinese mills had agreed to pay 33 percent less than the 2008 prices, in line with settlements reached by Japanese and Korean mills.

The price agreed by the Chinese mills is not final, the negotiator said, adding that “once the Chinese iron ore price comes out, they will be reimbursed or pay more based on that final price.”

Sources had told Reuters that the China Iron and Steel Association, which had taken over as lead negotiator in the talks this year and was holding out for a better price, would not formally acknowledge the mills’ interim deals.

This year’s negotiations have been particularly fraught, and reached an impasse earlier this month when four members of Rio’s iron ore team in Shanghai were detained for allegedly improperly acquiring state secrets.

China’s flagship steel mill, Baosteel, said in a statement sent to Chinese media that none of its employees had been detained or assisted in the investigation. Chinese media had earlier reported that the lead negotiator for previous years’ talks, who hailed from Baosteel, was among those investigated in the probe.

Traditionally, all the mills settle at whatever price is reached between any mill and any of the three miners, BHP, Rio and Vale. The Chinese mills’ agreements range in duration, the sources had said.

A lot of export oriented enterprises are seeking for the way out to get the rid of the hiking steel prices in Zhejiang Province. As the steel prices are on the rise, many traders do not plan to stock up steel products this year on the grounds of the yet to rally global market demands.

One of the traders in Zhejiang said “The steel products account for 70% to 80% costs in hardware products which would influence the latter a lot to some extent.”As per report, the price of steel products started moving upward earlier in April this year and more briskly in June up to CNY 4,300 per tonne from CNY 3,600 per tonne in early period.

As a matter of fact, some leading steel mills, like Angang, Benxi Steel, Wuhan Steel, Hebei Steel Group and Shagang etc have lifted their ordering prices by CNY 300 per tonne or more. And recently, Baosteel has revealed its July prices, with the major products up by CNY 200 per tonne to CNY 600 per tonne which is far beyond the previous market expectation of CNY 200 per tonne to CNY 300 per tonne.

Mr Wu Liyang GM of Special Steel Company said “Now, the supplying chain of the raw materials is over-concentrate. He said under the control of Zhejiang Zhongda Group Co Ltd the cooperation between Rio Tinto and BHP Billiton controlled the prices of raw materials which is certain to lead the price uptrend.”

Mr Wu noticed that “Furthermore, the profits space is shrinking. It is predicted that the cost expense will be added by 15%. Jumping prices may bring more capital circulation pressure to the enterprises. As a result, most enterprises would not receive long term orders in case the steel prices continue to go up.”An analyst of steel products disclosed that ”

On the contrary, the main driver behind the price rebound is the overall rallying down stream industries. The social inventory of steel products continues to scale down along with the improvements of the down stream consumption.

In short, there are more and more hardware enterprises noticing that the only way out for them is to enhance the technology-content of the products and develop their own advantages products.

It is announced Monday that Baoshan Iron & Steel Co., China’s largest steel maker, raised its August steels prices by 300-500 yuan/ton.

According to the report, Baosteel has adjusted up the ex-factory price of its hot-rolled steel products by 300-500 yuan/ton and that of cold-rolled steel products by 500 yuan/ton for next month.

After the price adjustment, Baosteel’s August price for SPHC 2.75-3.0 mm hot-rolled steel sets at 4,042 yuan/ton (pretax), and SPCC 1.0 mm cold-rolled steel price at 4,876 yuan/ton (pretax).

It is reported that the company’s August price policy will be executed from August 13.