UPDATE 1-China seeks one iron ore price in tough '09 talks

QINGDAO, China Oct 23 (Reuters) - China's steel industry will seek a unified iron ore price from Brazilian, Australian and Indian miners in 2009 pricing negotiations, the head of the Chinese industry body said on Thursday.

"We are seeking one price for iron ore imports from Australia, Brazil and India," Shan Shanghua, Secretary General of the China Iron and Steel Association, told reporters at a conference in Qingdao.

In 2008 price talks, Brazil's Vale (VALE5.SA) negotiated its price first, and secured a 65 increase in term prices for iron ore fines. But Australian producers Rio Tinto (RIO.L)(RIO.AX) and BHP Billiton, who settled later, managed a near 80 percent increase for fines.

Indian suppliers tend to sell their iron ore to China on the spot market.

Shan said China's top steelmaker, Baosteel Group, the parent of Baoshan Iron & Steel (600019.SS), would lead Chinese steelmakers in the 2009 talks, as last year.

"Currently, I still feel it is good to negotiate iron ore prices once a year," Shan said.

He said Chinese steel mills had already begun contacting major iron ore suppliers about next year's long-term price. But he added that the annual price negotiation was likely to be tough because of global economic uncertainty.

China's steel sector is already feeling the impact of the global economic slowdown and mills are shutting down capacity in response to falling prices and high costs.

"About 30-40 percent of small steel mills in the Tangshan area, home of small and medium-sized Chinese steel mills, have shut down due to losses," Shan said.

For a factbox on China's steel output cuts, click on [ID:nSHA291717]. (Reporting by Alfred Cang; Editing by Anne-Marie Roantree)