Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

China's top steel mills create group to probe surging iron ore prices - document

07/05/2019 | 03:15am EDT
Workers pack cold rolled steel coil at a steel company in Zhangjiagang

BEIJING (Reuters) - China's leading steel companies have formed a group to investigate whether "non-market factors" are causing a record surge in iron ore prices and have called on the government to maintain market stability.

Executives from eight steel firms representing 30% of China's steel output, including China Baowu Group, HBIS Group, Jiangsu Shagang Group [JSSGG.UL] and Ansteel Group, gathered at the China Iron and Steel Association (CISA) on June 27 in Beijing, according a document with the minutes from the meeting that was reviewed by Reuters.

A senior official at CISA who attended the meeting confirmed the authenticity of the document, declining to be named as he is not authorised to talk to the media.

The companies met to discuss strategies to cope with a rally in imported iron ore prices, which have climbed 69% this year, hitting a record on Wednesday.

The eight steel mills will create an investigation group, led by Baowu and assisted by the others, to look into the pricing methodology of imported iron ore, to coordinate with futures exchanges to stabilise the market, and to plead to government departments to "sustain market order".

In the meeting note, the companies and the CISA blamed the price surge on poorly designed methodologies by price reporting agencies publishing physical prices, speculators in the futures market and poor trading mechanisms in the spot market.

"There are some non-market factors behind the price rally. Especially in the recent two months, some steel mills reckoned that there was no obvious contraction between demand and supply," the meeting note said.

The mills and the CISA did not respond to inquiries by Reuters seeking official comment.

The plan is to report the recent market situation, including concerns regarding imported iron price discovery, to the general office of the National Development and Reform Commission (NDRC), the Ministry of Industry and Information Technology (MIIT), the Ministry of Commerce, and the State Administration of Market Regulation, the minutes of the meeting showed.

The government agencies did not respond to requests for comments.

Prices for iron ore cargoes with a 62% iron content for delivery into China climbed to a record $126.50 a tonne on Wednesday, data from consultants Steelhome showed.

Iron ore supply has declined after Brazilian miners cut output for safety checks after the disaster at a Vale mine in Brazil in January, when a tailings dam collapsed killing about 300 people, and a cyclone in Western Australia disrupted shipments from there. [SH-CCN-IRNOR62]

The countries are China's two biggest iron ore suppliers.

Iron ore futures on the Dalian Commodity Exchange have doubled since the beginning of 2019 and reached a record high of 911.5 yuan ($132.59) a tonne on Wednesday. It closed at 829.5 yuan on Friday.


(Graphic: China steel output vs production margins,

(Reporting by Muyu Xu and Shivani Singh; editing by Christian Schmollinger)


ę Reuters 2019
Stocks mentioned in the article
ChangeLast1st jan.
ANGANG STEEL COMPANY LIMITED 3.42% 4.23 End-of-day quote.39.14%
BAOSHAN IRON & STEEL CO., LTD. -4.76% 7 End-of-day quote.17.65%
BEIJING SHOUGANG CO., LTD. -1.82% 5.39 End-of-day quote.40.73%
BHP GROUP -2.45% 46.52 End-of-day quote.9.64%
DISCOVERY, INC. -1.12% 29.08 Delayed Quote.-3.36%
FORTESCUE METALS GROUP LIMITED -0.84% 22.42 End-of-day quote.-4.31%
HBIS COMPANY LIMITED -0.82% 2.41 End-of-day quote.7.59%
HUNAN VALIN STEEL CO., LTD. -0.60% 6.58 End-of-day quote.37.66%
JIANGSU SHAGANG CO., LTD. 0.30% 9.93 End-of-day quote.-9.48%
MAANSHAN IRON & STEEL COMPANY LIMITED -0.28% 3.62 End-of-day quote.36.09%
RIO TINTO GROUP -0.61% 123.47 End-of-day quote.8.47%
RIO TINTO GROUP -1.24% 5809 Delayed Quote.6.20%
SHANDONG IRON AND STEEL COMPANY LTD. 0.00% 1.66 End-of-day quote.16.08%
US DOLLAR / CHINESE YUAN RENMINBI (USD/CNY) 0.00% 6.4525 Delayed Quote.-1.18%
VALE S.A. 3.01% 109.09 End-of-day quote.24.75%
Latest news "Economy & Forex"
09:19aBusinesses, U.S. legislators fume as Canada extends travel ban; Trudeau stands firm
RE
08:27aHardline judge wins landslide in Iran presidential vote amid low turnout
RE
07:44aOlympics-Tokyo cancels public viewing sites, some to be vaccination centres
RE
07:21aEU warns Lebanon's leaders of sanctions over 'home-made' crisis
RE
06:37aSouth African rand heads for almost 4% weekly loss on hawkish Fed
RE
06:37aIndia ask states to 'carefully calibrate' lockdown easing
RE
06:31aNigerian programmes awaited
RE
05:45aCENTRAL PEOPLE GOVERNMENT OF PEOPLE REá : China allocates more funds to boost inclusive finance in 2021
PU
04:26aIran's foreign minister says Raisi is new elected president
RE
04:23aPREMIER OF GOVERNMENT OF PEOPLE REPUBLICá : 2021/06/19Farmers' interests to be safeguarded
PU
Latest news "Economy & Forex"