It is said from Shan Shanghua (general secretary of China Iron & Steel Association) that CISA will strictly adopt a unified price and the agency system for imported iron ores next year.
CISA is reported to have removed about 10 enterprises off the list of companies with iron ore import qualification, while the association always added some new members to list in the past years. “It shows how determined CISA is in regulating the market.” Said an official with CISA.
A senior official of Shandong Iron & Steel told 21st Century Business Herald that CISA is actually preparing for the 2010 international iron ore negotiations now.
“Although CISA declares that negotiations for the 2009 prices are still going on, there won’t be any new results. We have begun preparing for the 2010 negotiations, but haven’t stated any real talk with the three iron ore suppliers.”
The senior official said.The three iron ore suppliers are Vale, BHP Billiton and Rio Tinto.At mid September, Tom Schutte, chief of BHP’s Sales Department, said that the talk for iron ore price in 2010 would start this October.
Although iron ore price talk is declared to start in October each year, the routine is that the real negotiation only begins in next year’s January, and both sides use the strategy of “playing for time” to add to its bargaining chip.Investment banks like Goldman Sacks, Merrill Lynch, UBS and JP Morgan, expect the iron ore price of long-term contracts may rise between 10 to 20 percent in 2010.However, Zeng Jiesheng, analyst with China’s information provider MySteel.com, says the investment banks may be exaggerating and the final price will largely rely on the market demand and supply.
According to MySteel.com statistics, Iron ore stock at major Chinese ports reached 73.32 million tons by 18 September. Currently, Chinese steel plants and traders are stocking iron ores on a dim outlook towards the 2010 international talk.