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.