Iron ore talks between Chinese steel makers and international suppliers has finally broken the deadlock.

The China Iron and Steel Association said on Monday that Chinese steel mills have secured a 35 percent cut from Australia's Fortescue Metals Group. The price agreement will last for the second half of this year.

Under the agreement, Chinese mills will pay 94 US cents a dry metric ton unit for fine iron ore. That's equal to 55.5 US dollars a metric ton for Fortescue's products. The price stands at about 3 percent below the non-China benchmark set by larger rivals.

The association says China will ask the world's biggest producers Vale SA, BHP Billiton and Rio Tinto for a similar reduction. China had sought a discount of 45 percent this year, more than the 33 percent offered by Rio Tinto to Asian customers. It argued the country should enjoy a bigger cut as the world's largest buyer.