Workers handle iron ore at Rizhao port, Shandong province. Chinese steel producers want an alternative index because they claim current indices favor the global mining companies. [Photo/China Daily]

BEIJING - The China Iron & Steel Association (CISA), the country's steel lobby, will begin publishing its weekly iron ore index "CIOPI" every Monday, starting in October.

The index, released in conjunction with the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters and the Metallurgical Mines' Association of China, is based on calculations of price data collected from 93 percent of domestic ores and 95 percent of imports, said Zhu Jimin, chairman of the CISA, on Sept 20.

In September, Luo Bingsheng, deputy Party secretary of the association, said that the index aims to better reflect the Chinese market and to give the country a greater say in ore prices.

He said Chinese steel makers will not be forced to replace other price indicators with the CISA index, although he was confident that it would be well received by CISA members.

Platts, the Metal Bulletin and the Steel Index currently publish iron ore indices based on figures derived by deducting freight costs from the three-month average of daily iron ore indices and taking a one-month lag into account. The price index released by Platts is widely used by the three major global iron ore producers - Vale SA, Rio Tinto Group and BHP Billiton Ltd.

Chinese industry participants and steel makers argue this indicates that the Platts index works in the miners' favor.

Li Xinchuang, deputy secretary-general of the CISA, said earlier that the Platts index reflects only a small portion of the iron ore trade on the spot market and doesn't reflect the full picture.

Imported ore accounted for 63 percent of China's total consumption in 2010, said Zhu, adding that rising prices have squeezed steel makers' profit.

China imported 448 million tons of iron ore in the first eight months, up 10.6 percent year-on-year, while imported ore prices surged 37.5 percent during the period, meaning that Chinese buyers had to pay an extra $20 billion, according to data released by the CISA on Sept 20.

Some domestic media including Xinhua News Agency and the Chinese consultancies Custeel.com, Umetals.com and Mysteel.com already issue indices based on domestic and imported prices, but none of these are acknowledged by the global mining companies.