SteelOrbis Shanghai Even though the
iron ore negotiations for 2006 were concluded fairly recently, preparations for the 2007 global talks are already underway, with the official opening scheduled for late October-early November. Ahead of the vital talks, both the supply and demand parties are already preparing the terrain with a view to claiming advantage for their respective positions in the negotiations. From
China's standpoint: 1. On September 12, the
China Iron & Steel Association (CISA) gathered the top leaders of 70 mills at Jiangxi Nanchang for an internal meeting. The purpose of this meeting was to enhance the qualification of mills that can import
iron ore, so as to improve the unity of the Chinese mills at the negotiations. Sources reported that the
China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters (CCCMC) suggested enlarging the Chinese negotiation team. Therefore, the CCCMC and the
China Steel Group are now expected to join the negotiation team formed by the 16 leading mills. 2. On September 16, Luo Bingsheng, CISA Standing Committee Vice-Chairman and General Secretary, declared at the 2006
China Iron & Steel Raw Material Market Conference that the fact that the Chinese mills would attend the negotiations under the rules set by the other parties was unfavorable for
China. From the standpoint of the international ore giants: 1. On September 18,
Rio Tinto took the initiative in exchanging ideas with Chinese steel giant
Baosteel regarding future cooperation. As one of the major
iron ore exporting countries,
Australia is also preparing the negotiations on
iron ore for 2007. 2.
BHP Billiton and
Rio Tinto both attended the third
China International
Production Safety Conference held in Beijing from September 19 to 21. On September 21, Chip Goodyear, CEO of
BHP Billiton, made a speech at Beijing University. The top
Rio Tinto officials held a press conference on
production safety cooperation between
China and
Australia. It seems that the international giants are trying to create a favorable atmosphere for the upcoming negotiations. 3. On September 21, Companhia
Vale do RioDoce (CVRD) announced that it had inked a long term supply contract with two Chinese steel mills. It also indicated that since
China would boost the global demand for
iron ore, maybe they would sharply hike their prices in 2007. Interestingly, as one of the three major ore suppliers for
China,
India is facing fierce disputes on
iron ore exports between its domestic mines and steel mills. The Indian steel mills hope their government will limit
iron ore exports, thus reserving resources for the future development of the mills. On the other hand,
India's Ministry of Mines has urged the government to allow the continuation of exports. R K Sharma, General Secretary of Indian Association of Mining, indicates that if the current market mechanism is disturbed, many private mines will go bankrupt and that this could directly lead to the loss of the jobs of more than 1 million mining workers.