British media: China Integration of iron ore procurement "may be alarmed Canberra"

The British "Financial Times" June 16th article, original topic: China will set up a centralized purchasing agency for iron ore to compete with Australia. With the pursuit of the pricing power of Beijing's iron ore industry, China is adopting actions and will pass through and pass through. A new centralized management group was established by the end of this year to integrate the iron ore import business of this country. A person familiar with the matter revealed that the initiative was led by the relevant departments.

China is the world's largest iron ore consumption. The domestic steel industry consumes about 70%of global iron ore output each year, most of which are supplied by Australia. Given that iron ore is the largest export product in Australia, any related actions may be alarmed Canberra. Beijing hopes that the above -mentioned new entities will ensure reducing the price of iron ore by batch procurement. The project also seek to increase China's domestic iron ore output and organize larger large -scale investment in overseas minerals. China can reduce its dependence on Australian iron ore by increasing the purchase of Brazilian products. China also supports a joint enterprise to develop the iron ore of Guinea. Analysts said that the infrastructure cost of related projects will reach $ 15 billion, and it takes several years to build. However, the relevant parties will soon reach a development agreement.

The major price fluctuations led by Australian enterprises have fluctuated, and China is dissatisfied with it. In recent years, the price of iron ore has soared sharply, which has led to the reduction in the profit margin of Chinese steel companies to individual digits. A senior executive of Nanjing Iron and Steel Group said: "Because the price of iron ore has changed so quickly, it is difficult for us to make production plans." The relevant actions adopted by China are also likely to attract high attention of these Australian companies. A expert in Beijing said: "For the world's largest market (China) service, iron ore suppliers (Australian enterprises) cannot turn to any other market."

Some analysts have skepticism about whether Beijing can enforce the relevant provisions of hundreds of small steel factories scattered all over China. However, predictions on China are usually inaccurate because the domestic market may change rapidly. "We will do those things that are most in our interests," said the managers of a small steel factory in Hebei. (Author Sun Yu et al., Cui Xiaodong translated)

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