Despite difficulties, the promotion of a national unified iron ore price is underway. As long-contract iron ore prices have yet to be determined this year, the CISA is considering putting forward a unified guide price, said Shan Shanghua, secretary-general of the China Iron and Steel Association (CISA), according to a Beijing Times report.
Shan denied the rumor that the National Development and Reform Commission (NDRC) has rejected the CISA's proposal to shut down the "on the spot" trading market and implement a national unified iron ore price.
To regulate the current disorder in iron ore imports and awkward coexistence of iron ore long-term agreements and "on the spot" trading, the CISA recently proposed rectifying order in iron ore imports, comprehensively promoting an import agency system and implementing a national unified price for imported iron ore.
Shan explained that a unified price for imported iron ore involves either "on the spot" trading mines, long-contract mines or Brazilian, Australian and Indian mines, implementing a unified price with the benchmark import price determined by buyers and sellers following regular iron ore negotiations.
He said that the CISA is also considering putting forward a guide price for imported iron ore because long-contract iron ore prices have yet to be determined this year. The guide price will be determined after considering steel plants' profit, production cost, ore output and other factors. It will become a national unified benchmark price for imported iron ore.
CISA deputy chairman Luo Bingsheng explained that once the benchmark price is determined, it should be calculated differentially according to iron tenors of various grades of iron ore because there are price variances in Brazilian, Australian and Indian iron ores due to different iron tenors.
By People's Daily Online