International negotiations on iron ore for the year 2006 will be launched at the Fifth China International Steel & Raw Material Conference to be held on October 24. China Iron & Steel Association and China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters (CCCMC) said iron ore price should be declining in 2006.

In April 2005, Chinese steel companies had to accept an iron ore price hike of 71.5 percent agreed upon by Japanese companies and BHP Billiton. Before the negotiation for 2006 begins both the buyers and suppliers have shown tough positions. On October 10 China Iron & Steel Association published an article titled Iron Ore Demand-Supply Situation Tends to Ease Up, Iron Ore Imports Should Lower Prices. However, both the Brazilian Companhia Vale do Rio Doce-CVRD and Australian BHP Billiton said prices in 2006 would continue to rise.

Liang Ruodong, director of the metal and mineral products department of CCCMC, said judging from iron ore's demand and production a trend has shown of declining prices for the year 2006. Spot iron ore trade between China and India will also affect the negotiation on iron ore price in 2006. From January to September 2005 China imported the largest amount of iron ores from India next only to that from Australia.