BEIJING - As of last night iron ore price negotiations appear to have stalled between BHP Billiton and Chinese steel-makers.

With so much at stake for both parties, it seems inconceivable and more than a little thrilling that the Australian mining giant would dig its heels in over a percentage which, if achieved, will be something less of a financial top-up for its shareholders and more of an infuriating and spectacular loss of face for its largest, most fundamental and most volatile customer.

There is a perceptible sense of detachment to the possibility of a BHP / Sino trainwreck on the part of the world's largest primary resources company. As if to highlight its own penny-pinching behaviour and reinforce China's already raging suspicions, BHP's competitor and target in a 160 billion (US) hostile takeover bid, Rio Tinto, last week secured an agreement with Baosteel for a 79.8 % to 96.5%  iron ore contract spike.

Considered both workable and lucrative, it stands in desperate contrast to what CISA (China Iron and Steel Assoc.) has politely described in an official statement as "improper and unfair" haggling on the part of BHP whose negotiations have already long passed the June 30 deadline.

Foolhardy or cocksure, BHP's decision to push for contract prices based on highly-profitable screens-based trading, rather than the traditional annual agreements, may very well box CISA into a corner. At the very least it's going to piss a lot of people off.

The world's biggest steelmaker, which happily consumes up to half the globe's annual iron ore, has already shown its displeasure and opposition to the proposed Rio takeover and may very possibly draw a line in the sand over perceived slights. Traditionally giving voice to long-term compatibility over short term profit, and with the United Nations Conference on Trade and Development, (UNCTAD) this week forecasting 600 million tonnes of new iron ore production likely to come on-stream over the next two years (loosening China's dependence on BHP's product), the ingredients are in place for a startling realization of the threat of a China BHP boycott.

The economic repercussions of which will not only make for great telly, but also put a dent in Australia's faltering economy, kept largely afloat on the back of the China fuelled resources boom.