According to China Beijing International Mining Exchange (CBMX), China's first physical iron ore trading platform formally opened for business today, Tuesday, May 8, launched by CBMX, the China Iron and Steel Association (CISA) and the China Chamber of Commerce for Metals, Mineral and Chemicals Importers and Exporters (CCCMC).
China believes that its position as the world's biggest iron ore consumer entitles it to a bigger say on prices, and the new platform is its latest move to gain increased control as compared to the biggest miners.
So far, although the top three miners in the world, namely, Vale, Rio Tinto and BHP Billiton, have joined the trading platform, it is not clear how much iron ore they are willing to trade via the platform. The effectiveness of the new Chinese iron ore spot trading platform will be dependent on the extent of the participation of these three miners. Major Chinese steel producers including Baosteel, Hebei Steel and WISCO have all signed up as members of the electronic trading platform.