Freight charges are the focus for steelmakers

BEIJING - The focus of iron ore negotiations between Chinese steelmakers and global iron ore producers this year will shift to freight price stabilization, to keep steelmakers' costs low, the Economic Observer Newspaper reported.

China's steel mills and its steel lobby body, the China Iron and Steel Association (CISA), have accepted the mechanism of quarterly iron ore pricing, the report said. In January, the Australian miner BHP Billiton Ltd moved to a monthly set-pricing system after three mining companies abandoned a 40-year tradition of annual iron ore negotiations in March 2010 and turned to a quarterly pricing mechanism linked to iron ore indexes.

The CISA has previously insisted that Chinese steel mills should have long-term iron ore prices, which could stabilize their raw material costs.