Zhang Xiaogang, chairman of China's Iron & Steel Association (CISA), has disclosed the CISA's attitude towards the 2008 iron ore talks. The principal extracts of the statement published on the CISA website are as follows:
1.The CISA and other Chinese steel corporations agree with and respect the results of the iron ore price negotiations for 2008 between Baosteel and CVRD, which comply with international iron ore trade rules and international conventions..
2.Since the sharp rise in international iron ore prices lead to increased steel production costs, China's steel corporations have been experiencing growing pressure from rising costs. In this context, it is necessary for Chinese steel companies to put more emphasis on technology development and innovation, to raise the technological content of steel products, to develop high-end products and to increase the proportion of high-value products. At the same time, it is also important to strengthen corporation management and energy-saving and to improve competitiveness.
3.Due to the sharp price increase on a global basis in raw fuels such as iron ores, coke, coal and crude oil, steel production has already entered a high cost period. Looking to the future development trend, steel prices in both the domestic and international markets will continue to move at a high level.
4.With regard to strategy, China's steel industry needs to build a long-term and stable industry chain to supply raw fuels like iron ores and coal. Chinese steel corporations should have further cooperation and exchanges with overseas companies and enhance its investments in the running or co-running of overseas mines. Thus, China's steel corporations will be able to build a long-term and stable base for iron and coke supply.