China eyes more Indian ore

China eyes more Indian ore

The downward trend seen in the prices of iron ore imported from India to China led the Chinese steelmakers to consider importing more iron ore from India. In this respect, China's Shanghai based Baosteel Group and Maanshan Iron Steel Co. intend to sign long term contracts with Indian iron ore suppliers in order to eliminate the volatility of the spot market. The steelmakers of China had started to increase their Indian iron ore purchases from the spot market following the high 71.5% increase by the Brazilian and Australian iron ore sellers. Therefore the Indian iron ore prices had also increased in the spot market. However, the spot market started to cool down when the central government of China started the iron ore licensing system and cancelled the tax rebate on billet exports. Signing of long-term contracts with the Indian iron ore sellers would increase the supplier diversification of the major steel producer of China, leading to a competition among the suppliers.