Center

Baosteel settles deal with 3 major iron ore providers

(Xinhua)
Updated: 2006-12-23 13:42

The three iron ore giants raised prices for Chinese steel mills by over 70 percent in the 2005 financial year.

The steel companies were forced to accept a 19 percent rise this year.

Market analysts said the 9.5 percent growth rate basically reflected the supply and demand situation in today's world iron ore market.

Though China still had a growing demand for iron ore, the growth rate had slowed.

On the other hand, China has seen a decline in domestic steel consumption this year and the country's fixed assets investment in the iron and steel industry slowed.

Analysts said the shrinking growth rate of the iron ore price also reflected the balance of interests between China's steel makers and the international iron ore providers.

China is the world's largest iron ore consumer and it certainly needed the support of the international iron ore providers, said a senior manager with Baosteel.

But, he said, the leading iron ore providers had also grown dependent on China's steel industry. As a result, a long-term stable strategic cooperative relationship should be formed.

Baosteel has more than 30,000 employees and its output exceeded 20 million tons last year.