China not giving ground in iron ore talks - CISA

SHANGHAI May 20 (Reuters) - China's steelmakers have not given any ground in benchmark iron ore price talks, an industry executive said on Wednesday, denying reports that they could soften their insistence on a 40 percent price cut.

China's steel industry, the world's biggest, traditionally sets a global benchmark each year after lengthy talks with three miners that dominate the iron ore trade: Vale (VALE5.SA), Rio Tinto (RIO.L)(RIO.AX) and BHP Billiton (BHP.AX)(BLT.L).

"The position of the Chinese side has never changed," Shan Shanghua, secretary general of the China Iron and Steel Association (CISA), told Reuters in a telephone interview. "Any news about our changes was speculation."

Shan denied media reports on Wednesday that CISA could accept a price cut by between 30 percent and 35 percent.

China's steel industry has been reiterating its view that term iron ore prices should fall by at least 40 percent to 2007/08 levels, pressuring miners to accept deep price cuts, as steel firms struggle with faltering demand.

"We insist on three principles during the negotiation: the relation between the supply and demand, the balance of production costs between the two sides and the balance of rational profits between the two sides," Shan said.

"They are our principles. It is not sustainable if iron ore producers keep a high profit margin but steel mills suffer losses. It is common sense," he said.