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Shan Shanghua, secretary-general of China's top iron ore negotiator China Iron and Steel Association (CISA), said on Friday that iron ore contracts should run for a calendar year instead of beginning on April 1, according to the Japanese financial year.
"We will not insist on other countries taking China's iron ore price as a reference," he said at an iron ore conference in the coastal city of Qingdao.
The iron ore conference is usually regarded as the unofficial start of benchmark price negotiations for the next contract year.
"There may be another failure in an effort to reach agreement on a benchmark price next year, as happened this year, if CISA sticks to its position," a mining executive familiar with the negotiations told China Daily on the sidelines of the conference on Friday.
"BHP prefers to use spot prices, which are market-oriented and index-linked," he said. "If both sides are not happy with the benchmark price negotiation, the next year ore trading might again be based on spot rates."
Iron ore is the only commodity that is negotiated with a benchmark price system. Other commodities such as copper and oil are linked to an index.
This year's iron ore price negotiations became deadlocked in June when China insisted on a 45-percent discount on 2008-09 prices after a 33-percent cut in benchmark iron ore prices had been set with other Asia steel mills.
Shan said Chinese steel mills would not be able to make money at the current price that iron ore producers are demanding because an oversupply is causing steel prices to fall sharply.
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