SteelOrbis Shanghai
Concerning Vale's insistence on its iron ore price hike for Chinese importers, China Iron and Steel Association (CISA) vice chairman Luo Bingsheng has stated that the CISA is working on a detailed plan to substitute Brazilian iron ore imports with domestic ore supplies.
Mr. Luo remarked that the iron ore inventory at Chinese ports is now increasing at a remarkable rate, amounting to 71 million mt by the end of last week. As a result, he said, it would be inadvisable for Vale to further raise its contract ore price, which has already equaled the spot price of Indian ore.
Mr. Luo also indicated that Chinese steel enterprises should move to upgrade their own steelmaking technologies in order to eliminate their dependence on Brazilian iron ore. In their process of building new and stable iron ore supply channels, Mr. Luo said that domestic mills should also control their iron ore consumption. Furthermore, he added that the CISA has encouraged domestic mines to produce more iron ore, thus reducing the consumption of Brazilian ore.
As regards the sharp jump in China's steel exports in July and August, Mr. Luo said he thought this was a special case and that the future export market is expected to be less positive. He went on to say that, although it is impossible to see an overall tax rebate cancellation for all kinds of steel exports, the government will surely cancel the export rebate for some improper export activities, for instance for exports of common steels under the name of alloy steels.