Wednesday, November 25, 2009

CISA Begins Preparations for 2010 Benchmark Talks

On November 23, the China Iron and Steel Association (CISA) vice chairman Luo Bingsheng disclosed that the preparations for the iron ore contract negotiations for 2010 have started, while adding that in the meantime the CISA was actively making efforts to facilitate the formulation of iron ore import qualifications for Chinese enterprises.

Mr. Luo said that the 2010 iron ore negotiation had entered a pre-negotiation phase as both the supply and demand sides had carried out preliminary exchanges of ideas on the future supply and demand situation.

As regards the views on iron ore prices for the coming year, the Chinese side thinks that there will not be much room for an increase in iron ore prices from overseas miners; meanwhile, the three iron ore giants and some investment banks consider that market demand for iron ore and other raw materials will grow following the overall recovery of steel demand in China and across the world.

Since the month of October, spot prices of iron ore have again been climbing up slowly, breaking $100/mt in November, much higher than the annual long-term agreement prices reached between Rio Tinto and Nippon Steel. This is closely linked to the disorder in China's import ore market, commented Luo Bingsheng. It is in this context, he said, that the CISA is now reexamining the iron ore import qualifications of Chinese enterprises together with other authorities.

Source: Alibaba

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