After a market survey, experts from CISA have proposed that China should implement the iron ore storage strategy to prevent the China's steel industry from price manipulation.
According to a report released by CISA, China's the biggest iron ore importer in the world and account for approximately 75% of the entire global iron ore market share. Meanwhile the three behemoth iron ore suppliers have already monopolized the market and promote the iron ore price hike year by year. On the contrast, the steelmakers' profitability in China has declined step by step.
"At present there are clues which have shown clear price manipulations. For example, for Sep 2010 China's iron ore imports soared significantly while China's pig iron output still remained at a pretty low level, which did not match the increasing imports of the iron ore. Besides the China's crude steel output was also elevated drastically by other countries, consequently the spot and index price for the iron ore had reached $200/t and $180/t respectively. Actually for last year China's averaged iron ore price was only $128/t and $150/t for the Q1 of this year.' Wu Xinchun, an official from CISA said.
"Obviously the iron ore suppliers are now trying to blow a bigger bubble which will gain the risks and uncertainties to the steelmakers. Therefore the iron ore as one of the national strategic resources should be reserved and China's government should establish a specified organization to manage and operate the related policies, which will contribute to address the imbalanced issues pertained to steelmaking sector.' Mr Wu said.