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China sees reducing iron ore supply
Last Updated(Beijing Time):2007-07-19 09:40

The three leading global iron ore suppliers are reducing their supply to China to ensure strong prices ahead of negotiations to set a benchmark price for the year beginning in April 2008, the China Iron and Steel Association has alleged.

CISA said Brazil's Companhia Vale do Rio Doce and Anglo-Australian miners BHP Billiton and Rio Tinto are 'working together' to strengthen their negotiating positions.

'China's iron ore imports fell just 6.4 pct year-on-year in June, but the Big Three are working together to reduce supplies to China in the third quarter by at least five mln tons. This will force us to rely on expensive spot rates and is an attempt by the miners to strengthen their position prior to the 2008 talks. It will alter the natural supply and demand,' the industry organization said on its website.

The major iron ore suppliers negotiate annually with steelmaking blocs in Japan, Europe and China to set a year to March benchmark price for their iron ore exports. The contract price agreed by the first bloc to arrive at a deal usually influences the prices agreed with other blocs

Earlier this week, CISA said that China's top steelmaker, Baosteel would continue to lead negotiations on the Chinese side.

CISA deputy chief Luo Bingsheng also projected the Chinese supply and demand for iron ore from the international market to be basically balanced balance, with supply possibly exceeding demand.

Luo projected China's imports of iron ore for 2007 at around 367 mln tons.

Source:AFX News 
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