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.

It is said from the European Union on Thursday that deciding to slap five-year duties on steel pipe imported from China on alleged dumping charges.

The long-term tariffs were up to 39.2 percent as a punishment to Chinese exporters for allegedly selling seamless pipe and tubes below cost in the EU, the European Commission said.

The decision was based on a vote at the end of July by trade officials and experts from EU member states.

The five-year duties, which are much higher than the provisional ones imposed in April, will take effect after the EU’s Official Journal publishes the decision by Oct. 8.

The 27-bloc imposed provisional duties of up to 24.2 percent in April on such products imported from China.

The EU began to a probe in July 2008 over a dumping complaint by a group of European producers.

Despite a commitment to fight protectionism made at the G-20 summits in Washington and London, the EU has tended to resort to protectionism to protect its own producers in recent years.

It has refused to recognize China’s market economy status, taking advantage to imposed tariffs on Chinese products including shoes, steel wire, pipes, tubes and bicycles.

The practice not only hurts Chinese exporters but also European consumers, according to consumer groups in Europe.

It is said that the Chinese market is becoming increasingly important to international iron ore giants.

The Anglo-Australian mining company Rio Tinto said Monday that its 750 million US dollar sale of iron ore assets, including the Corumba mine to Brazilian competitor Vale, has been approved by the Brazilian Defense Council.

Rio sold the core assets not only to repay debts and reduce liabilities, but also because it has gradually lost its advantage in the global iron ore market.

The case in which Rio employees were accused of obtaining commercial secrets and bribery has given rise to Vale’s market share in China. Apart from large advertising campaigns in China’s mainstream media, Vale even planned to touch down on the Chinese stock market.

CSLA’s China chairman Wu Changgen said on Monday that many multinational companies including Vale have inquired about A-share listings and intend to list on the international board on the Shanghai Stock Exchange.

Statistics show Brazil’s iron ore exports to China came to 82.620 million tons during the first half of the year, up 28.06 million tons from the same period last year. Its exports to Japan, South Korea, and the European market respectively declined 8 million tons, 1 million tons, and 30 million tons.

It is said from ecperts that China has taken 71 percent of Brazilian iron ore exports to date. The Chinese market is critical to Vale’s success on the global market.

It is reported from China Securities Journal that large steel makers in China, including Taiyuan Iron and Steel, Baotou Iron and Steel, and Shougang Group, are expected to receive less contract demand in September than August, about 300,000 tons less.

Analysts with Umetal.com attributed the cut in orders mainly to steel price slump in August.

Earlier, Wuhan Iron and Steel, the parent company of Wugang Steel had cut its October prices by between 150 and 400 yuan/ton. But analysts say the company’s prices are still at a relatively high level, so the planned output of 1.1 to 1.2 million tons for September will be hard to achieve.

The Baosteel Group, the parent company of Baosteel, still has a number of August contracts to fulfill, so the company’s production in September will be only marginally influenced.

The Jiangsu Shagang Group is reported to be cutting or canceling margins so as to increase orders.

Anshan Steel and Maanshan Steel both have some production lines under overhaul, so their output is expected to decrease by 200,000 tons.

Meanwhile, many steel plants indicate that the agents only have to take up 60 to 80 percent of the specified quantity under terms of their agreements.

As statistics monitored by information provider MySteel.com show, steel stocks in 22 monitored major cities of China surged to 10.947 million tons in early September, up 53.6 percent from a year earlier.

The figure is close to the yearly peak of 10.96 million tons recorded in early March. Within this figure, stocks of building steels accounted for 5.442 million tons, 2.021 million tons more than the same period of last year and up 59 percent year on year, while steel sheets totaled 5.505 million tons, up 48.6 percent on year.

Even though steel products prices were falling, China’s crude steel output still hit a record high of 52.33 million tons in August. And the output from January to August totaled 370 million tons, up 5.2 percent year on year, according to the latest data released by the China National Bureau of Statistics.

A steel price slide signals a shrinkage in market demand. However, because there is still a profit margin, steel plants are still reluctant to take the initiative to cut production.

Xu Xiangchun, an analyst with MySteel.com said “None of the steel plants would like to cut output, but each hopes the others cut.”

As reported by China Securities Journal, steel plants in Hebei province, an important steel production base of China, have no intention to cut production at present.

“Our plant produced 217,100 tons of crude steel in August, the most on record. We are currently operating at full capacity, so the figure for September is expected to be above 200,000 tons,” an unidentified manager of a steel group at Handan, Hebei province, told China Securities Journal.

He also admitted that profit has dropped to between 200 and 300 yuan per ton after steel prices slumped by 700 to 800 yuan per ton.

“The stocks pile up because steel output greatly exceeds the demand. Although China’s crude steel output has only grown by a small margin over last year, the domestic market cannot digest so many products originally produced for export,” Xu Xiangchun noted.

China’s steel export has shrunk drastically this year because of the global economic recession. From this January to July, China exported crude steel of 1.86 million tons, while the figure for the same period of last year was 26.25 million tons.

“Under the slumping prices, traders and end-users are more prudent in purchasing steel products, which also caused the stock to rise,” said analyst Ma Zhongpu.

“The excessive output will lead steel prices to drop further, but by a much smaller margin than in August.” Said Xu.

In August, steel prices in China slumped by some 1,000 yuan per ton. Since September, the price drop of building steels and steel sheets has shrunk to between 100 and 250 yuan per ton. Yao Hong, president of Zenith Iron and Steel, expects the price slumps to continue until the end of September.

Earlier, China’s top steelmaker Baosteel has cut its October prices by between 200 and 500 yuan per ton, while Wugang has cut by between 300 and 400 yuan per ton. In comparison, Angang’s price cut range is wider and falls more in market expectation. On Friday, Angang cut its October prices by some 450 yuan per ton.