Rise in iron ore price accepted
By Jiang Wei (China Daily)
Updated: 2006-06-21 08:35 Chinese firms had insisted that suppliers should take into account the high
demand of the Chinese market, and suggested a lower price.
The nation's
steelmakers, which account for 43 per cent of global imports of iron ore, tried
to set prices after a record increase in 2005. But their bargaining position
weakened on May 16 when Germany's ThyssenKrupp AG became the first steelmaker
globally to agree to the new price.
The 19 per cent hike is the
second-biggest price jump in 25 years, according to ABN Amro. It follows a
record 71.5 per cent rise in 2005.
Although Baosteel failed to get a
favourable result, the talks still set a good example, said Mei Xinyu, a
researcher with the Chinese Academy of International Trade and Economic
Co-operation of the Ministry of Commerce.
"It is the first time domestic
iron ore importers have asked for Chinese factors to be considered during iron
ore negotiations," he said. "And in order to gain more say for China, they
should stick to collective negotiation in the future."
In the past
Chinese iron ore importers and steel makers negotiated the iron ore price
separately, which often resulted in speculation in pricing.
Chinese
buyers were forced to accept the sharp price rise last year.
Mei also
noted that Chinese negotiators should pay more attention to issues such as
reform of the domestic steel industry and collaboration with other major
buyers.
"They (Chinese firms) are less experienced compared with their
negotiation rivals, who have controlled the market for years," he
said.
Chinese imports of iron ore rose by 23.5 per cent to 108 million
tons in the first four months of this year.
(For more biz stories, please visit Industry Updates)
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