CRI听力: CISA: China should have More Say in International Iron Ore Price Negotiations

Senior officials of the China Iron and Steel Association have called for more Chinese influence in international iron ore price negotiations.

They made the comments to coincide with the organization's agreement with Anglo-Australian Fortescue Metals Group Ltd. on a major price cut for iron ore fines.

Ying Ying has the details.

Reporter:

On Monday, China Iron and Steel Association, or CISA, announced that it had reached an agreement with FMG for July-December imports of Fortescue's rocket fines for 94 US cents per dry metric ton unit.

CISA secretary-general Shan Shanghua explains.

"FMG promises to sell iron ore to Chinese steel enterprises at a unified price. That is from July 1st to December 31st, the price for rocket fines is 94 US cents per metric ton unit on the basis of free on the board. This price is 35 percent less than that of last year. The price for lump ore is set at 100 US cents a metric ton unit, which is 50.4 percent less than last year. So we believe Chinese enterprises can accept these prices."

Liu Zhenjiang, vice chairman of CISA, said this agreement is a major step forward for China to create what he called a "Chinese Model" in the international iron ore price negotiations.

"Why should we establish a 'Chinese Model'? Because China will import about 500 million tons of iron ore for the whole year, comprising more than a half of the world's total iron ore trade volume on the sea. If the iron ore price rises by just one US dollar per ton, China will have to pay another 500 million US dollars for the import of the raw material. It's not fair for other minor iron ore importers to set the price for China. We must overturn the unfairness."

In May, Australia's iron ore miner Rio Tinto agreed with Japan's Nippon Steel Corporation on cutting this year's price for fines by about 33 percent from last year. Meanwhile, they cut the price for lumps by nearly 44 and a half percent.

But China Iron and Steel Association said that Chinese steel enterprises can't accept the prices.

To protect the interests of Chinese companies, Liu Zhenjiang said now is time for China to play its due role in the international iron ore price settings.

"From the perspective of market fairness, we must work quickly to set up the Chinese Model. China should seek more say in the iron ore talks through consistent efforts."(www.hXen.com)

CISA said that it will also negotiate with Australia's Rio Tinto and BHP Billiton and Brazil's Vale on iron ore prices according to the format created by the successful agreement with FMG.

Analysts pointed out that the newly signed deal is a successful attempt by China to break the impasse with the world's three biggest iron ore miners.

Ying Ying, CRI news.