Tuesday, September 28,
Shan Shanghua, secretary general of the China Iron & Steel Association (CISA), said Iron ore prices should be based on steel prices, a reversal of the current market in which China, the world’s biggest steelmaker, is the top Iron ore buyer.
Australia is China’s top source of imported Iron ore and a major investment destination for Chinese companies, including steel mills, many of which have stakes in Iron ore mines there.
But Australian Iron ore costs could see a rise because Australian Prime Minister Julia Gillard has proposed a 30% tax on coal and Iron ore mining profits from 2012.
Commenting on this Shan said, “Chinese steelmakers will not be able to accept rising costs from the Australian Iron ore mining tax as steel prices will reach a ceiling, and downstream users including automakers and producers of home appliances won’t absorb rising costs”.
“Moreover Iron ore imports is expected to fall this year, with domestic production expected to exceed 1.1 billion tonnes, adding that China would recycle more steel scrap, with 100 million tonnes expected to be generated this year and more in the future”, he added.
Source: Reuters
Leave a Reply