UPDATE 1-China Minmetals cuts iron ore imports on low price

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BEIJING, Nov 12 (Reuters) - Chinese trading firm Minmetals Corp has cut imports of iron ore by about 3 percent this year amid falling prices, its president said on Wednesday.

Chinese spot iron ore prices have crashed, losing more than two thirds since they hit a record high in the spring, and leaving trading firms forced to sell expensive imports into a weakening domestic market.

Spot prices are now below the price of term iron ore from Australia or Brazil, weakening the demand for term iron ore. Minmetals and its fellow state-owned trader, Sinosteel, import some ore on term contract and some at spot rates, to sell to domestic mills that aren't big enough to import or ship their own.

"There's been some impact, but the problem isn't big, because we have domestic mines and have adjusted our sourcing accordingly," president Zhou Zhongshu told reporters.

"We had a plan of response quite early and we cut our imports."

Minmetals is likely to import about 10 million tonnes of iron ore to China in 2008, Zhou said.

It imported 10.3 million tonnes in 2007.

Iron ore has piled up in Chinese ports as local demand has weakened, and is now equivalent to about nine weeks of import demand, compared with a steady rate of about five weeks' stocks in the last few years.

The high stocks and weakening demand are likely to undermine miners' negotiating positions in annual talks for term iron ore prices in the year beginning in April 2009.

(Reporting by Lucy Hornby; Editing by Ken Wills)