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Iron ore traders 'to join contract talks'

By Yu Liang (China Daily)
Updated: 2006-09-28 10:12

The country's two largest iron ore traders, China Minmetal Corp and Sinosteel Corporation, are likely to be included in the negotiation team for next year's talks.

Sinosteel President Huang Tianwen was quoted by China Business News as saying that traders are more familiar with international trade rules and would offer useful suggestions if allowed to participate in the negotiations.

Professional traders are a major force in the negotiating teams of some other key iron ore import countries, such as Japan.

Although steel producers had led long-term iron ore contract negotiations over the past two years, almost two-thirds of the country's imports were controlled by traders.

China, the world's largest steelmaker, significantly cut its iron ore imports in the second quarter of this year due to increased investment in domestic mines, international price hikes and an increased domestic ore supply, said Luo Bingsheng, vice-president of the China Steel and Iron Industry Association.

China's iron ore imports in the first quarter of 2006 grew 27.73 per cent year-on-year, while they dropped 18.45 per cent in the second quarter, and rose just 14.56 per cent in July. 

China's iron ore imports will continue to fall slightly in the coming months, said Luo.

It is estimated that China's iron ore imports will total 312 million tons this year, meaning that annual growth will slow to around 13 per cent. The country's iron ore imports have increased over 30 per cent year-on-year over the past five years.

Some experts expected that the continued rise in China's iron ore  output would put pressure on iron ore prices.

Chinese iron ore importers suffered price increases of over 40 per cent in 2005 and 15 per cent in 2006.