David Lague and Wayne Arnold: China’s diplomatic war over ore

From the IHT:

China is applying diplomatic pressure on Australia to keep the Melbourne-based BHP Billiton from doubling what Chinese steel makers pay for the company’s ore shipments…

BHP is asking Chinese steel makers to pay almost 20 percent more for its iron ore than they agreed to pay its main competitors, Rio Tinto and Cia. Vale do Rio Doce.

Sixteen Chinese major steel makers, including Boasteel and Wuhansteel, rejected what they called BHP’s “irrational demand” last week and agreed to set up an industry group to maximize their leverage in price talks, according to the China Iron and Steel Association.