The China Iron and Steel Association (CISA) announced Monday that it has reached an agreement with Australian mining company Fortescue Metals Group (FMG) on unified iron ore pricing of 94 US cents per tonne for fine ores and 100 US cents per tonne for block ores.

The agreement will run from July 1 to December 31, 2009, CISA said in a statement published on its website.

The agreement cuts fine iron ore prices by 35.02 percent and block ore prices by 50.42 percent from their 2008 levels.

The results of the negotiations are "acceptable on both the supply and the demand sides", CISA said.

In May, Australian iron ore giant Rio Tinto reached agreement with Japan's Nippon Steel Corporation on the price for Hamersley iron ore deliveries. Under the agreement, the prices of fine ores and block ores were cut by 32.95 percent and 44.47 percent from 2008 levels. CISA said at the time that the price cut failed to reflect the real conditions of supply and demand on the international market and would lead to overall losses for Chinese steel companies.

CISA insisted that the iron ore prices should fall back to the 2007 levels, which would mean a price cut of over 40 percent. Although the final result has not met CISA's target, the price cut is much bigger than that in the Rio Tinto-Nippon steel pact.

(China.org.cn by Yan Pei August 17, 2009)