China's steelmakers may lose ore price fight again

MELBOURNE: Steelmakers in China, the world's largest consumer of iron ore, may fail to prevent an increase in prices of the raw material again next year as global demand outpaces production.

Credit Suisse Group and Beijing Antaike Information are forecasting prices may rise in 2007 for a third straight record, after gaining 19 percent to 47 dollar a metric ton this year.

Soaring demand in China and limited mine expansion has driven spot prices as much as a fifth higher than the benchmark as Baosteel Group, the nation's biggest steelmaker, prepares to lead Asian mills in initial contract talks in October with suppliers including Cia. Vale do Rio Doce.