Despite hinting earlier this week that it may back a shift to quarterly contracts, Baosteel Group Corp., China’s lead negotiator for annual ore price talks with global miners, on Friday emphasised that it supports the existing system of pricing iron ore once a year. However, the company acknowledged that the 40-year-old format could be altered.
A company media official told Dow Jones Newswires that media reports on Thursday citing Chairman Xu Lejiang's remarks – made on the sidelines of a shipping conference in Shanghai - had missed the context setting out Baosteel's support for the existing system.
"The benchmark annual pricing system was set up 40 years ago, and miners, steel mills and the market have changed a lot since then, so it is reasonable that the system has some changes and adjustments now," the Baosteel official said, repeating what he said were Xu's actual remarks.
"But Baosteel supports the long-term annual contract system. This system is beneficial for steel mills and raw material suppliers to build a long-term and stable relationship based on cooperation. It also benefits the stability and prosperity of the industry chain."
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