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China should have more say in global iron ore trade
(chinadaily.com.cn/Xinhua)
Updated: 2009-08-13 14:21

BEIJING: As the world's largest iron ore buyer, China should have more say in the global iron ore trade, Industry and Information Technology Minister Li Yizhong said Thursday.

China should have more say in global iron ore trade
Li Yizhong, Minister of China's Industry and Information Technology attends a press conference in Beijing, Aug. 13, 2009. [Xinhua]
China should have more say in global iron ore trade

"Spot prices of iron ore are increasing sharply on the global market and we hope to see an appropriate relationship between spot prices and long-term contract prices," Li said at a press conference.

The Chinese government will back the China Iron & Steel Association in iron ore price negotiations to ease the situation of the continuous rising spot iron ore price caused by the "chaotic situation" and disorderly competition within Chinese importers, according to Li.

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He said the world's major iron ore suppliers should deal with the issue in a fair manner in consideration of their long standing friendly cooperation with China, and there is room for the current situation (of the price talks) to be improved.

According to customs statistics, China imported 355.3 million tonnes of iron ore in the first seven months this year, an increase of 31.8 percent from a year earlier.

China's iron ore demand would not continue its rising trend as the government restructured the steel industry in an effort to solve the excess capacity problem, Li said.

China had stockpiled more than 200 million tonnes of iron ore bought at record high prices of US$140 to US$160 per tonne last year because of "disorderly" imports. Domestic steel makers suffered tremendous losses when prices plunged to US$30 per tonne as the global economic downturn sapped demand, he said.

Iron ore price negotiations with Rio Tinto, the world's second largest iron ore supplier, have hit a stalemat with Rio Tinto sticking to its offer of a 33-percent price cut for 2009-2010 contracts, while the CISA insists on a deeper cut.

There are more than 700 steel makers and 112 iron ore importers in China. In 2008, the country imported 443 million tonnes of ironore, more than half of the world's total shipments.