The China Iron and Steel Association has denied market rumors
that it has set a 30-percent ceiling price rise in talks with iron
ore suppliers, according to a report in Thursday's China
Securities Journal.
Association vice chairman Luo Bingsheng said the rumors were not
helping negotiations for 2008 iron ore imports, the paper
reported.
According to rumors, the world's three major iron ore providers,
BHP Billiton, Rio Tinto and CVRD, wanted to raise prices by least
50 percent.
"There is not such ceiling on the Chinese side, and such
pre-determined ceilings cannot facilitate the process of the
negotiation," said Luo, adding the association would pay close
attention to how the negotiations could benefit the Chinese iron
and steel industry's development.
China, the world's largest steel producer and consumer, imported
383 million tons of iron ore in 2007, up 57 million tons or 17.4
percent year on year, according to statistics from China
Customs.
Luo predicted that imports this year would rise by 40 million
tons.
"Domestic demand growth for pig iron will probably drop from
14.11 percent in the second half of 2007 to 12 percent in 2008 and
exports of iron and steel products by domestic manufacturers are
expected to decrease by 20 million tons," said Luo.
China is expected to eliminate 100 million tons of iron
production capacity and 55 million tons of steel production
capacity from 2006 to 2010.
The world's biggest iron ore provider, BHP Billiton, announced
on Wednesday it had signed a 10-year deal to supply China's Baoshan
Iron and Steel Co. (Baosteel) with an additional 94 million tons of
iron ore.
BHP Billiton would supply 10 million tons of iron ore annually
to China's largest steel producer, up from six million tons under
previous long-term supply arrangements, the two said in separate
statements.
On behalf of Chinese steelmakers, Baosteel has been negotiating
2008 prices since December 2007 with major iron ore providers,
including BHP Billiton, Rio Tinto and CVRD.
In late 2006, Chinese steel makers agreed with major providers
on a 9.5-percent price rise for iron ore imports for 2007. The
lower-than-expected increase was deemed a success for Chinese
buyers.
(Xinhua News Agency January 31, 2008)
