"This means the steel mills have three months' supply and are not in a rush to buy right now," he added.

The saga began when the China Iron and Steel Association wanted a major cut in the iron ore price, largely set by Rio, the Anglo-Australian giant BHP Billiton and the Brazilian company Vale.

A cut would have reflected the new harsher economic conditions since the price was last set a year ago.

Then the major producers managed to get away with an 85 percent increase since ore prices were soaring at the time.

This year, Japan and South Korea settled for a 33-percent cut in the spring but China hung out for more and didn't get it.

The dispute between China and Rio Tinto has now extended beyond mere price negotiation.

Earlier this month, four Rio Tinto executives were detained in China on alleged spying charges said to be linked to China steel production targets, which could have provided useful information in any negotiation. Rio and the Australian government have denied any wrongdoing.

Zang said the slump in imports would have a significant impact on the port.

"I am concerned about the situation because delivery volumes directly affect the company's revenue," he said.

The port chief added the group was taking steps to boost imports of coal and other raw material to fill the void caused by a shortage of iron ore imports.

"We have been taking steps toward this since February. Coal has always been a major business for the port and this is a logical step for us to take because of the shortfall in the iron ore business."

There may be other steps to move away from the dependence on iron ore, which could be announced shortly.

Vale said about half its shipments to China are being bought at the same price levels agreed in annual contracts with mills in other nations, Bloomberg said yesterday.

Some Chinese steelmakers are unofficially accepting the new benchmark ore prices, which are 28 percent lower than last year, said a Vale spokeswoman.

Bloomberg also reported that BHP Billiton agreed to sell 30 percent of its iron ore under new pricing mechanisms, signaling a break with the 40- year-old tradition of settling annual contracts in Asia.

The ore will be sold through a mix of cash, quarterly and indexed pricing, BHP said in a statement yesterday.

(China Daily July 30, 2009)