BEIJING (Reuters) – China launched its first physical iron ore trading platform on Monday in the latest move by the world’s biggest iron ore consumer to strengthen its pricing power over a raw material long dominated by giant foreign suppliers.
The China Beijing International Mining Exchange (CBMX) launched the online platform together with the China Iron Steel Association (CISA) and the China Chamber of Commerce of Metals Minerals Chemicals Importers Exporters.
CBMX also launched a new pricing index that it hopes will better reflect actual supply and demand and eliminate the effects of speculation and manipulation.
China has long believed that its position as the world’s biggest iron ore consumer entitles it to a bigger say on prices, and the new platform is its latest move to wrest control from the big three global miners, Vale (Sao Paolo:VALE5.SA – News), BHP Billiton (ASX:BHP.AX – News)(LSE:BLT.L – News) and Rio Tinto (ASX:RIO.AX – News)(LSE:RIO.L – News), which between them control three quarters of global seaborne ore supplies.
“Monopoly practices and price manipulations have a massive impact on current iron ore prices and have also inflicted fatal harm on Chinese steel enterprises,” Wang Xiaoqi, deputy chairman of CISA, said at the launch ceremony.
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