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MOC to support steel mills in iron ore talks

By Hu Yang (chinadaily.com.cn)
Updated: 2010-03-17 17:18

China's Ministry of Commerce (MOC) will take moves to support Chinese steel mills in the iron ore talk with foreign producers, including adopting necessary trade measures, the China Securities Journal reported.

MOC spokesman Yao Jian made the remarks during Tuesday's regular press conference, saying the ministry will work with the Ministry of Industry and Information Technology to address the situation. But he did not reveal the specific measures.

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Yao said according to the international practice of the commodity trade, the major buyer should have a say in the pricing mechanism. China, as the largest consumer of iron ore, is entitled to have its interests reflected in the price talks.

The price rise demanded by the major ore suppliers, namely BHP Billiton, Rio Tinto and Vale, has soared from 20-30 percent to 80-90 percent since the negotiation began, forcing Chinese steelmakers to appeal for government support.

The price hike of iron ore puts Chinese steelmakers in a difficult situation. Ma Honglie, former chairman of a steel mill in Gansu province, said the profit of the steel industry will be squeezed this year although the price of steel will increase by a large margin.