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DJ China Assoc:CVRD Proposed Ore Price Hike Inappropriate -2(Comtex Business Via Thomson Dialog NewsEdge)Apr 03, 2006 (Dow Jones Commodities News via Comtex) --Chinese buyers, led by China's Shanghai Baosteel Group Corp., are in the midst of price talks with leading suppliers BHP Billiton Ltd. (BHP) and Rio Tinto PLC (RTP) and CVRD, who account for a combined 70% of global iron ore export sales. Analysts expect iron ore prices to rise up to 20% in the coming contract year, after rising 71.5% last year. The association said price information should only be released after at least one iron ore provider has made a pricing agreement with a steel maker. It said CVRD's proposed price hike was "unacceptable." Overcapacity and oversupply has emerged in China's steelmaking industry since the second half of 2005, the association said. That means growth in the steel industry and that for iron ore demand has slowed, it said. In addition, supply and demand for iron ore have shifted toward a balance after previous years of tightness as suppliers expanded output, helped by high prices and profits in recent years, the association said. The association said annual price negotiations for iron ore take into consideration the interests of both parties and should not harm the long-term cooperation relationship of the two sides. Chinese Premier Wen Jiabao, in Canberra this week, said Monday iron ore prices should be set by the market, in comments that followed reports in recent weeks that the Chinese government was threatening to intervene in iron ore price talks and set a cap on the price of iron ore imports. "I believe this is a matter to be decided by the market," Wen told a media briefing in Canberra after signing a nuclear energy pact with Australian Prime Minister John Howard. Wen said iron ore prices would be set according to commercial negotiations between buyers and sellers. -By J.R. Wu, Dow Jones Newswires; 8610 6588-5848; [email protected] -Edited by George Bernard (END) Dow Jones Newswires 04-03-06 2059ET |