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Ore center denies it is trading

CHINA'S first so-called iron ore trading center yesterday said it is not engaged in trading the raw material for steel-making, bowing to the nation's steel industry group, which voiced concern about the center on Tuesday.

"The center's business is confined to the publishing of information on iron ore trading," said the Rizhao Iron Ore Trade Center, which was launched last month. "We have never and are unlikely to ever conduct a transaction for iron ore."

Citing an official from the Rizhao center's preparation team, however, Xinhua news agency last month said the Rizhao center offers services, including electronic transaction, information exchange, quality inspection, storage, transportation, insurance and settlement for iron ore trading.

The China Iron and Steel Association on Tuesday said such regional iron ore centers are for speculative trading and asked authorities to terminate their business licenses.

CISA, which opposes a price index fearing it would undermine its pricing power with miners, said such centers violate the national steel industry development plan.

The Rizhao center yesterday said it agreed with CISA's stance and is willing to be guided by the steel association and China's mining commerce chamber.

This is a temporary victory for CISA, which is eager to regulate the domestic market at a time when it is busy negotiating annual contract prices with global miners.

Rizhao, in Shandong Province, is China's leading port for handling iron ore. The center is funded by five private companies. The center aims to establish China's own price index for iron ore to reflect its role as a top buyer, Xinhua said.

Meanwhile, Baoshan Iron and Steel Co, China's top listed mill, is reported to have raised prices for major products for next month's delivery by up to 15 percent from this month, according to the industry consultancy Umetal. The rise cannot be immediately verified since Baosteel does not publish prices.


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