CHINA was not curbing spot iron ore imports, a steel association official has said, denying comments by traders that the country was trying to influence ore price talks with Australian miners.

Several cargoes of Australian iron ore for spot delivery have been stranded at Chinese ports after China delayed issuing permits, traders and shipping officials have said.

Luo Bingsheng, vice president of the China Iron and Steel Association, said during the weekend at an industry conference that the association, which represents major steel mills in China, was urging miners to increase the proportion of long-term iron ore deals in their supply to China, the world’s largest steelmaking country.

“It is improper for iron ore suppliers to cut term iron ore sales due to force majeure, but raise spot sales,” Luo said.

The report on stranded Australian ore cargoes emerged last week as Chinese steel mills and Australian miners Rio Tinto and BHP Billiton are in a deadlock over 2008 term prices for iron ore.

Brazil’s Vale, the world’s largest iron ore producer, in February agreed to 2008 term iron ore prices with Chinese steel mills that are 65 to 71 percent higher than the previous year. This benchmark is normally followed by Australian miners.

But soaring prices for spot material have emboldened Rio and BHP to try for even higher prices based on their freight advantage over Brazil. Shipping costs from Brazil are more than double those of about US$30 a ton from Australia.

Chinese steel mills are angry that Australian miners were trying to shift some cargo into the spot market, where returns still exceed long-term contract prices. (SD-Agencies)