中国正式推出铁矿石价格指数

The index consists of two sub-indices, to track the domestic iron ore prices and import prices.

China Iron and Steel Association says the data collecting system is running well as the iron ore index had its trail operation in August.

The steel industry maintained fast growth in the first half of the year, with steel output reaching 350 million tonnes, up 9.6 percent from a year earlier
Zhu Jimin, Chairman of China Iron and Steel Association, says soaring iron ore prices have squeezed profits of China's steel producers.

"During the first eight months this year, China imported 448 million tons of iron ore, an increase of 10.6 percent. The average CIF price of iron ore rose 37.5 percent to $164.36 US dollars per ton, an increase of $44.8 US dollars per ton compare to last year. The cost of the iron ore industry went up nearly 130 billion yuan because the companies had to pay more than $20 billion US dollar due to the price increase."

Nearly 60 percent of China's domestic consumption relies on import.

From 2001 to 2010, the country's iron ore import rose from 90 million tons to over 600 million.

Zhou Wangjun, an official with China's National Developmet and Reform, says the new index is imminent as the country's iron ore demand surged.

"China can't have a bigger say in the price bargaining because it does not has strong information of the cost price of iron ore. It leads to the rising price of the raw material and the drop of the companies' profit, the huge increase of the foreign exchange payment."

The majority of the world iron ore resources are monopolized by Vale, Rio Tinto and BHP Billiton.

The world's three-largest iron ore producers last year abandoned a 40-year custom of annual pricing in favor of quarterly agreements as spot ore prices surged last year.

Zhou Wangjun says the new index would help to break the monopoly.

"The establishment of the iron ore index would help to form a expected price, which can lower the cost of steel companies and break the monopoly by world's large iron ore producers. It is significant to enhance China's bargaining ability."

The index will be published on a weekly basis starting from October 1st.

For CRI, I am Wei Tong.