A Chinese industry group vowed yesterday to tighten control over iron ore trading as Chinese steel makers discussed strategy for contentious price talks with global miners.

The China Iron and Steel Association gathered representatives of major mills at a meeting yesterday and affirmed its determination to control the iron ore trade, according to Xu Xiangchun, chief analyst at mysteel.com, a Website that follows the industry. The meeting also was reported by Chinese media.

Three major miners, Vale, BHP Billiton Ltd and Rio Tinto, control about two-thirds of global iron ore trading. They have reached agreements with some major mills, primarily in Asia, to set prices on a quarterly basis instead of annually, which will give them more control in pricing flexibility.

On Thursday, Brazil's Vale, the world's largest iron ore miner, announced it has reached new agreements with most of its clients "based on short-term market references and price changes on a quarterly basis."

Chinese and European steel makers oppose the shift, which so far reportedly has led to price increases of 80 to 100 percent. China has fought to retain annual arrangements, hoping that would give it more leverage over prices. CISA declined comment on the issue yesterday.

China's iron ore imports soared nearly 42 percent in 2009 from a year earlier to 630 million tons. Analysts say traders were building up stockpiles in anticipation of the collapse of annual contracts and sharply higher prices this year.

The government has protested that soaring costs are hurting steel mill profits and is seeking to prevent traders from pushing prices still higher as mills compete for limited iron ore supplies.

Chinese steel makers have also stepped up efforts to find new iron ore sources and boost domestic production.

China's biggest domestic iron ore miner, a subsidiary of steel maker Angang Group, plans to spend 14.7 billion yuan (US$2.2 billion) to double its annual output in the next decade, Xinhua news agency reported. It said the miner now produces 45 million tons of ore a year.

European steel makers have reacted angrily to the new pricing system and are pushing for a European Union antitrust probe of the three major suppliers. European auto makers and engineering companies also say higher iron ore costs could harm their businesses.