AFX News Limited Weak Indian iron ore prices give China leverage in supplier talks - CNMA
12.28.2005, 02:18 AM
BEIJING (AFX) - China is expected to benefit from weak Indian iron ore prices as it negotiates 2006 supply agreements with the world's three major iron ore suppliers, the China Non-ferrous Metals Association (CNMA) said on its website.
The CNMA quoted Jiang Liangqun, a steel expert in Shanghai, as saying China has new leverage against Brazil's Companhia Vale do Rio Doce and Anglo-Australian groups BHP Billiton and Rio Tinto.
The association said free on board prices for Indian iron ore with 63.5 pct purity have fallen to 51-52 usd per ton recently, from 55 usd per ton, due to falling demand from China.
Iron ore produced by India accounts for about 20 pct of China's total imports, the CNMA said.
China's domestic iron ore prices have been falling since November, and have dropped by about 100 yuan per ton so far, the association added.
Domestic media reported earlier this month that demand projections for iron ore products in 2006 have emerged as a major sticking point in the ongoing talks between Asian importers and iron ore suppliers.
Talks with Chinese importers started on Nov 30, and after two rounds, the parties are still far apart on fundamental issues, according to reports.
This year's talks are expected to be much tougher than last year's, when suppliers and buyers both acknowledged that iron ore prices should rise in 2005 due to higher demand.
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