On March 11, the China Iron and Steel Association (CISA) hosted a meeting with the main Chinese steelmakers to discuss the current situation of the continuous rise in iron ore prices and the perceived increasingly aggressive stance of the ‘big three' iron ore miners - BHP Billiton, Rio Tinto and Vale - in the ongoing annual iron ore price talks. As a result of the meeting, the CISA and the heads of 10 major domestic steel producers, including Baosteel, WISCO, Anshan Steel and Hebei Steel Group, sent a letter to Chinese Premier Wen Jiabao asking his government to intervene on the issue of iron ore import prices.
The CISA and the steelmakers stated in the letter that, with the global economy improving, market demand for steel products has been increasing, thus pushing iron ore prices up. Faced with higher iron ore prices, the Chinese steel producers warned that they would have to pass the raw material cost increase on to customers. In the domestic market, however, some traders have privately signed supply agreements with the overseas miners, thereby strengthening the advantage of the miners in the current talks. In this context, the CISA expressed its impotence in reversing the tide alone.