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China to launch own iron ore price index in Oct

08-03-2011 09:31 BJT

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China plans to launch its own iron ore price index in October this year, according to the China Iron and Steel Association, or CISA. The move is designed to improve pricing power over the key steel making ingredient.

China, by far the world's biggest steel producer, has been eager to gain more say over iron ore prices on the world market. CISA has long complained that the indexes now in use and published by Metal Bulletin, The Steel Index, and Platts, favor the iron ore exporting countries.

Workers weld steel bars at Ningbo Railway Line construction site.China plans to launch its own iron ore price index in October this year.

The new index is expected to better serve China's steel sector by using methodologies that are more transparent. It will include prices of iron ore concentrate on a dry basis from 32 domestic mines in 14 regions as well as import deals at eight ports.

Zhang Changfu, Secretary General from China Iron & Steel Assoc. said, "The proposal has already received the association's internal approval as well as related support, and will start trials in August, and be launched from October."

CISA has long complained that the monopoly practices of dominant global mining firms, together with chronic overcapacity at home, has made it hard for China to shed its passive role.

China plans to launch its own iron ore price index in October this year.

Zhang said, "Prices of imported iron ore averaged over 160 U.S. dollars per ton in the first half of this year, hitting a record high. The average price was up 47 dollars per ton year-on-year, which means we are paying 16 billion extra dollars in costs."

The steel industry maintained relatively fast growth in the first half of the year, with steel output reaching 350 million ton, up nearly 10 percent from a year earlier.

However, bigger production hasn't translated into bigger profits. The industry's sales to profit ratio was hurt due to soaring import prices for iron ore.

Editor:Li Wanran |Source: CNTV.CN

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