Rio Tinto last night slammed Chinese steelmakers over increasingly aggressive negotiating tactics, after the China Iron & Steel Association called for its members to boycott the Anglo-Australian mining group's spot sales of iron ore. The steelmakers have failed to agree a 2008-09 annual contract price with Rio and BHP Billiton despite months of talks. Earlier this year, the Chinese authorities delayed issuing permits needed to import some shipments of Australian iron ore, a move that was also considered a negotiating ploy. Rio has demanded a price for the annual contracts in excess of the 65-71 per cent rise agreed between Vale, the Brazilian miner, and Chinese steelmakers. The Chinese pay less to ship Rio's ore from Australia. Rio, which is fighting a hostile takeover bid from BHP worth at least $160bn, has also provoked the Chinese by threatening to move away from traditional long-term contracts by selling more ore into the spot market, where prices are higher. In a statement published on its website yesterday, CISA said: "We appeal to domestic mills and traders not to support or take part in Rio Tinto's spot iron ore sales activities in China." Rio said it was entitled to sell into the spot market. "For CISA to suggest joint action by the Chinese steel industry to prevent this is a very concerning development." Spot iron ore prices of $180-$190 a tonne are markedly higher than the $108 a tonne agreed by Vale and its Chinese customers. CISA, whose members are China's large steel mills, accused Rio Tinto of acting in bad faith, telling customers it lacked supply to completely fulfil long-term contracts while at the same time offering iron ore on the spot market to capture higher prices. CISA said Rio had only supplied 86 per cent of iron ore specified under contracts in 2007 with Chinese clients while in 2006 it only supplied 88 per cent of the agreed amount. Around 20 Chinese steelmakers have long-term supply contracts with Rio Tinto. Rio said the comments should be considered in the "context of our ongoing price negotiations". It rejected the CISA's claims and added it had "rights under a number of contracts that include options to reduce volumes". Copyright The Financial Times Limited 2008