BEIJING -(Dow Jones)- The upside for iron ore benchmark prices remains "small" and "difficult," a senior China Iron and Steel Association official said Tuesday.
"The next round of negotiations hasn't started yet, and the two sides haven't met, but the situation of supply surpassing demand is still in effect, and the upside for price increase is small," said Vice Chairman Luo Bingsheng, according to a recording of a briefing for local media obtained by Dow Jones Newswires.
China is poised to enter the 2010-11 round of negotiations with major miners BHP Billiton Ltd. (BHP), Rio Tinto Ltd. (RTP) and Vale S.A. (VALE) on annual iron ore term prices.
This year's talks collapsed without a result, and Rio Tinto employees are still being held on Chinese charges of commercial spying over the pricing process.
"What the next step is, we need to negotiate," Luo said Tuesday. "The basic fact of iron ore supply outstripping demand isn't going to change. We can only say the 2010 round is at a prologue. We hope both sides can achieve a win-win outcome."
-By Chuin-Wei Yap, Dow Jones Newswires; 8610 8400 7704; chuin-wei.yap@dowjones.com