China Assoc Seeks Boycott Of Rio Tinto Spot Ore
BEIJING (Dow Jones)--The China Iron & Steel Association Thursday asked domestic steel mills and iron ore traders to boycott Rio Tinto PLC's (RTP) spot iron ore sales, as it alleged the company isn't fully meeting its long-term contract supply obligations with Chinese firms. The move will heighten tensions between Chinese steel makers and Rio Tinto, which is pushing hard for higher contract iron ore prices in heated negotiations with the mills. "I don't think this statement indicates that talks between Chinese mills and Australian iron ore suppliers are finished or will be broken off soon," said Ma Zhongpu, chief analyst with the Huarui Marketing Research Center. He added the association's announcement would add to the difficulty of the already tough talks. "But we must make a clear point that everyone should follow international iron ore talks rules," said Ma
China Set To Reduce Reliance On Resources Imports
BEIJING (Dow Jones)--China's recent acquisition spree in the resources sector is part of a strategy to reduce the country's reliance on raw material imports and fuel its rapidly growing economy, industry experts said. "We have relied too much on the iron ore imports, as the domestic iron ore supply can't meet the fast (steel) market growth," Ma Zhongpu, chief analyst with Huarui Marketing Research Center told Dow Jones Newswires. "China needs to change that situation through overseas acquisitions." This drive has gained momentum since BHP Billiton Ltd. (BHP) unveiled a $140 billion all-share proposal for Anglo-Australian mining giant Rio Tinto PLC (RTP), due to the significant pricing power such a giant supplier would have, especially as this year's tricky round of iron-ore price negotiations inch forward. A combined BHP and Rio Tinto would control almost 40% of seaborne iron ore production. Ma also said Chinese investors should also invest more in Africa and India.
China's steel industry cannot sustain expansion due to limited resources and environmental pollution
BEIJING (Dow Jones)--China's steelmaking industry cannot sustain its current expansion in production and exports due to limited resource supplies and a deteriorating environmental situation. However, as a net exporter of steel products, China will continue to supply global demand, and increase the number of overseas steel mills in the future, industry analysts told Dow Jones Newswire Tuesday. "Constructing steel complexes in other developing countries that have both adequate raw material supplies and growing demand will help offset the risk from high iron ore prices, freight rates and product oversupply," Ma Zhongpu, chief analyst with Huarui Marketing Research Center. Ma also called on the Chinese government to implement favorable policies, set up overseas development funds, and promote consolidation in the domestic steel industry in order to ensure steel groups can compete on the international market for overseas projects.
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