CISA to launch iron ore price index this June - report
Shanghai. May 16. INTERFAX-CHINA - The China Iron and Steel Association (CISA), an industry organization that represents China's major steel mills, is expected to launch the country's first price index for domestically-produced iron ore in June, the Chinese-language Economic Observer reported May 14.
A senior official with the CISA who wished to remain anonymous told Interfax that research for the index has been ongoing for some time, but an official deadline for its launch has yet to be set.
According to Umetal analyst Hui Kai, the introduction of a domestic iron ore price index will help China's steel mills to increase their influence over imported iron ore indices.
"As the majority of China's iron ore miners are small- or medium-sized, and the industry is less concentrated than the overseas iron ore market, China's steel mills therefore have more bargaining power when purchasing domestically-produced iron ore," Hu told Interfax. "China's steel mills will be able to influence the CISA price index, which is likely to have a knock-on effect on indices for imported iron ore," Hu added.
The Platts iron ore spot market assessment (IODEX), which is based on spot import prices, is currently the index most commonly used by global iron ore miners for their iron ore pricing mechanisms.
-XH
