Global iron ore suppliers have distorted the iron ore market and complicated benchmark talks by aggressively pushing spot sales, said China Iron & Steel Assn (Cisa).
The assn, which represents China in supply negotiations with Rio Tinto and BHP Billiton, claimed that 83% of China's iron ore imports this year had been on a spot basis.
It also claimed that 152 companies had imported iron ore, even though only 112 permits have been granted. This has "distorted demand and supply in the Chinese domestic iron ore market and severely disrupted iron ore import price negotiations", Cisa added.
China has imported 297 million tonnes of iron ore in the first six months, up 29% year-on-year, according to Chinese customs. China is engaged in a marathon negotiation with global suppliers to settled benchmark iron ore prices well past the June 30 deadline.
"Iron ore imports still significantly outpace output needs, causing iron ore inventory to build up at Chinese ports and extending unloading times, raising the speed at which freight rates are rising", it added.Higher freight costs have contributed to the rally in spot iron ore prices, which have surpassed $100 per tonne cfr with offers as high as $105 and set to increase further.
Market participants expect Indian iron ore miners to raise offers again next week. Cisa also warned that the Chinese steel industry faced a difficult and complicated second half due to the fragile foundation of the economy recovery and weak steel exports.
The assn, which represents China in supply negotiations with Rio Tinto and BHP Billiton, claimed that 83% of China's iron ore imports this year had been on a spot basis.
It also claimed that 152 companies had imported iron ore, even though only 112 permits have been granted. This has "distorted demand and supply in the Chinese domestic iron ore market and severely disrupted iron ore import price negotiations", Cisa added.
China has imported 297 million tonnes of iron ore in the first six months, up 29% year-on-year, according to Chinese customs. China is engaged in a marathon negotiation with global suppliers to settled benchmark iron ore prices well past the June 30 deadline.
"Iron ore imports still significantly outpace output needs, causing iron ore inventory to build up at Chinese ports and extending unloading times, raising the speed at which freight rates are rising", it added.Higher freight costs have contributed to the rally in spot iron ore prices, which have surpassed $100 per tonne cfr with offers as high as $105 and set to increase further.
Market participants expect Indian iron ore miners to raise offers again next week. Cisa also warned that the Chinese steel industry faced a difficult and complicated second half due to the fragile foundation of the economy recovery and weak steel exports.
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