China vows to support steel mills in iron ore talks

Sarkozy, Merkel warn US against protectionism
Paris (AFP) March 16, 2010 - President Nicolas Sarkozy of France and German Chancellor Angela Merkel warned the United States against protectionism Tuesday amid controversy over the awarding of a massive defence project. "The chancellor and the president affirmed that trans-Atlantic economic ties should be founded in open markets and fair competition," the European leaders said in a statement released by the French presidency. They called on Washington to "reject protectionist temptation, including in the defence sector, in which each year European Union countries buy three times as much weaponry from the United States as they sell there." US giant Boeing is to win a (35-billion-dollar) 26-billion-euro deal to supply aerial tankers after partners EADS and Northrop Grumman dropped out, citing changed Pentagon requirements they claimed favoured their rival.

France, home to EADS' subsidiary Airbus that was to have made the planes -- albeit at a plant in Spain -- has accused Washington of foregoing a chance to buy a better plane that in 2008 had been frontrunner for the deal. Germany has accused the United States of protectionism and said it will "take up the affair on a political level, and also at the level of the WTO." And Sarkozy has said he will bring up Europe's concerns directly with his US counterpart Barack Obama when he visits the White House later this month. "The chancellor and the president, in coordination with the European Commission and their European partners that are concerned, will examine the implications and future developments is this matter," the statement said. The Pentagon, which initially in 2008 favoured the European Airbus offer as providing a bigger and more versatile aircraft, insists that in now backing the cheaper Boeing version it is seeking best value for US taxpayers.

by Staff Writers
Beijing (AFP) March 16, 2010
China said Tuesday it will support domestic steel mills in their thorny iron ore price negotiations with global miners even after the Australian government bluntly told Beijing to stay out of the talks.

"As the world's largest iron ore consumer, the interests of Chinese steel mills should be reflected in the negotiations," commerce ministry spokesman Yao Jian told reporters.

The steel mills wanted to maintain the "long-term contract price mechanism" to avoid large price fluctuations for the commodity, he said.

Yao did not say how Beijing would support the steel mills in the negotiations, aimed at striking annual contracts with Anglo-Australian mining giants BHP Billiton and Rio Tinto, and Brazil's Vale.

China's state media reported at the weekend that more than 10 top domestic steel mills had asked Premier Wen Jiabao to make the iron ore benchmark price talks "a matter of national importance".

For the first time in decades, China's steel industry and the mining companies failed in 2009 to hammer out a deal on prices.

Steel industry leaders have warned the government they cannot agree to the 90 percent price hikes demanded by the miners and that such a rise could hurt national interests, the China Securities Journal reported.

"The domestic steel companies can no longer bear such high quotes of iron ore and have been forced to hike steel prices to pass on the costs," an unnamed source told the newspaper.

"Raising the solution of the iron ore imports issue to the national level can avoid internal friction and protect the overall interest of China's steel industry," it added.

Australia again urged China, the world's third largest economy, to stay out of the negotiating process and gave assurances that it would not get involved.

"You can't have the government intervene to set prices for what is an internationally traded commodity," Trade Minister Simon Crean told Australian radio.

"China wanted to be recognised as a market economy and what we say is that if that's the case, we have recognised you as a market economy, act like one. Act in accordance with market principles."

China's imports of the commodity surged by more than 40 percent last year to almost 628 million tonnes.

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Australia urges China to keep out of iron ore talks
Sydney (AFP) March 15, 2010
Australia on Monday urged China stay out of difficult iron ore price negotiations with global mining giants after steel mills lobbied Beijing to intervene. Trade Minister Simon Crean gave assurances Australia would also keep away from the fraught process in which steelmakers aim to strike annual contracts with Anglo-Australian firms BHP Billiton and Rio Tinto, and Brazil's Vale. "We won' ... read more

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