The China Iron and Steel Association (CISA) and the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC) held a meeting on April 14 in Xian, capital of the province of Shaanxi, in order to discuss countermeasures in response to the quarterly pricing system and the increased prices sought by the three iron ore giants, i.e., Vale, BHP Billiton and Rio Tinto.
The meeting was jointly held by the CISA and CCCMC, attended by Singapore Exchange officials, domestic and foreign iron ore suppliers and some specialists. While it is generally accepted that the CISA represents the large-size steel companies, the CCCMC speaks for the medium- and small-sized traders.
The two sides failed to reach agreement on all the problems regarding imports of iron ore. At the meeting, the CISA expressed the view that the traders are causing the huge price increase in iron ore by speculation, while the CCCMC disagreed with this.
Meanwhile, as regards the issues of spot prices and quarterly pricing, the CISA stated that it is not necessary to accept the quarterly pricing system for the time being since most domestic steel producers have enough iron ore inventories to last for some time and as iron ore stocks are plentiful at many Chinese ports. A senior CISA official called on domestic steel producers not to import iron ore from the three mining giants in the coming two months.
For its part, the CCCMC stated that spot materials can only be viewed as a means of supplementing long-term contract iron ore supplies, adding that, if spot iron ore supplies are used up, then the three iron ore giants will be able to raise their prices with even greater ease.