Chinese restocking of iron ore is at an end, according to BHP Billiton, the world's largest miner.
Ian Ashby, head of iron ore at BHP, told the Diggers and Dealers mining conference in Australia, that Chinese stockpiles had been rebuilt and port stocks were settling back to more normal levels.
The way iron ore is priced is currently in a state of flux. China has yet to agree new benchmark prices and BHP is trying to move toward a more transparent pricing mechanism.
Mr Ashby refused to comment on progress with the talks.
Last week, BHP said that over the next 12 months 30pc of total annual sales will be made through new pricing mechanisms.
For almost four decades prices for iron ore have been settled through annual rounds of price contracts but, of agreements reached so far this year, just 23pc of total iron volumes would be sold at these benchmark prices.
A further 30pc will be sold on a mixture of quarterly negotiated pricing and spot and index-based pricing. This has left the pricing of 47pc of annual volumes yet to be agreed, with most of these being Chinese mills.
Other Asian iron ore customers have agreed to a 33pc cut in the benchmark price, but China has been holding out for steeper reductions. Pricing discussions in China have become fraught after Chinese authorities arrested four members of Rio Tinto's iron ore team, accusing them of stealing state secrets and bribery.
Source: Daily Telegraph
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