September 06,
The abolition of a decades-old annual Iron ore pricing mechanism has damaged the long-term stable relationship between Iron ore majors and Chinese steel mills, a senior official at Chinese metals trader Minmetals said today.
“The current Iron ore pricing scheme, based on the spot price index, will bring more volatility to the market and the index derivative will also be easily controlled by speculators,” said Feng Guiquan, vice president of Minmetals, China.
Minmetals also warned that the more flexible Iron ore pricing system would increase risks for importers as they would not be able to lock in their purchasing prices.
Source: Reuters
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