As a result, the deal with FMG is widely seen as a milestone for China in the drawn-out battle for cheaper resources—and a hard-won achievement as the country seeks to shift the balance of power in the global commodities market.

It will help wean the country off reliance on the big three miners for iron ore supplies, and strongly relax their firm grip on prices, said Luo Bingsheng, Deputy Chairman of CISA, in a statement. Baosteel will continue with the negotiations using the FMG price as a reference, he added. The Ministry of Commerce also welcomed the deal, citing it as an innovative way out of the stalled price talks.

However, some analysts believe it is more a symbolic victory than a true breakthrough.

Even if some 20 million tons of ore could be secured during the rest of 2009 according to the deal, they note, FMG could hardly fulfill needs of China that, nowadays, imports roughly 50 million tons per month.

Besides this, the Australian mining company has little presence in other Asian markets—and had never participated in the pricing talks before. This has raised doubts over the eligibility of the deal as any gauge for global prices. In response, Rio Tinto said the new deal was irrelevant, while BHP Billiton and Vale declined to comment.

China still has a long way to go toward securing stable iron ore supplies, as the big three are less likely to cede clout over the pricing, said Xu Xiangchun, a senior analyst with the Shanghai-based Mysteel Research Institute, in an interview with the Shanghai Securities Journal. The buoyant demand of China means the iron ore market remains a seller's market, he added.

But at least it shows the country is taking the initiative to gain leverage with suppliers, signaling a switch from being a price-taker to price-maker, Xu added. FMG may make it into the big league in the near future, leaving China in a better position to bargain, he said.

Analysts have suggested that regulators further consolidate the fragmented steel industry, and form a concerted front in pricing negotiations. Many resources-hungry smaller mills are bypassing the CISA to strike separate deals with foreign miners, eventually driving up the spot market prices. This has put the Chinese negotiators on a tight spot.

The CISA had also vowed to unify the import prices and strengthen supervision to clean up the market environment.