Iron ore price negotiations are nearly in a coma, for iron-ore mining company BHP Billiton Ltd. (BHP) has already fixed a high proportion of its iron-ore business for 2011 onwards on a monthly price basis in January, breaking away from the quarterly global contract system, said Luo Bingsheng, former vice secretary general in China Iron &Steel Association (CISA) Wednesday during a meeting in Beijing.

The free on board (FOB) iron ore price offered from BHP to Chinese steel makers increased from $155 per ton to $168 per ton. Though other iron-ore mining giants have not clearly followed BHP's step, their price will inevitably raise, added Luo.

Due to various factors, such as China's great demand of iron ore, India's iron ore export limitation and Australia's disastrous flooding, the iron ore price in 2011 will experience a strong upward shot, and in the second and third quarters, the growth rate may be of 10 percent, said the Shanghai Securities News.

Decreasing the dependence on imports is a way to dodge such surprises, said Luo.

China has an iron ore reserve of 150 million tons due to its investments and cooperations with overseas companies of the field. And the country has also put effort into enlarging its own production capacity.

In two to three years, China's demand and supply of iron ore will be balanced, and then its ability to negotiate on price will resume, said Luo.