China bars iron ore sale on cash market

China blocked Australian miners BHP Billiton and Rio Tinto Group from selling iron core on the spot market, in a bid to urge them to settle contract prices, according to sources.

The China Iron & Steel Association and China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters warned importers that their licenses could be suspended for buying Australian iron ore on the spot market, said David Du, a CBI analyst.

The move came after Rio and BHP failed to conclude contract prices with Chinese steelmakers as they did in the past, as Rio Tinto was seeking more than 71% increase in the raw material, with a price rise of up to 100% for top-grade cores.

To a significant extent, the global iron mining industry is currently predominated by the top three producers - Vale do Rio Doce, BHP Billiton and Rio Tinto, which control over two-thirds of world production, largely deriving from mines in Brazil and Australia.

China, the world's largest steel consumer, has imported 383 million tons of iron ore in 2007, up 17.4% year-on-year, China Knowledge reported earlier.