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Report: China To Cut Iron Ore Imports

China to cut back on iron ore imports due to a pricing issue, which has long been a point of contention between Beijing and its foreign raw materials suppliers.

SHANGHAI, China (AP) -- China will cut back on imports of iron ore from Brazil after Companhia Vale do Rio Doce, the world's biggest iron ore miner, sought price increases from Asian customers, a report said Friday.

"In the near term China will use domestic iron ore and reduce or refrain from using Brazilian iron ore," the state-run newspaper China Securities Journal reported, citing Luo Bingsheng, head of the China Iron & Steel Association.

Iron ore pricing has long been a point of contention between China, the world's biggest steel producer and consumer, and its foreign raw materials suppliers.

Chinese steel industry officials say they do not have to rely on imports, especially now that the market has weakened amid the global economic slowdown.

Rio de Janeiro-based Vale said it is negotiating price increases with its clients in Asia, who it says pay about 11 percent less than the rates charged its European customers, depending on the type of iron ore that is purchased.

By increasing use of domestically mined iron ore, the Chinese steel industry can resolve its supply problems while also reducing domestic inventories of ore, the Securities Journal said.

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