2011-02-23 14:23

According to the latest research by the China Iron & Steel Association (CISA), price manipulation worsened in the iron ore market, it was revealed at an internal meeting on Tuesday.

CISA suggests the nation adopt iron ore reserves as a national strategy to help balance the development of the industry, Beijing Times reported Wednesday.

CISA said that currently, China is the largest iron ore importer, taking 75 percent of the world's total iron ore seaborne trade. As the three giants - Rio Tinto, BHP Billiton and Vale – dominated the market, they have been pushing the iron ore prices up for years. Chinese steel enterprises suffered from the price hike as their profit margin kept decreasing, the report said.

Wu Xinchun, deputy secretary-general of CISA, said price manipulation is a given in the industry. China's iron ore imports have continued to increase since last September, but its domestic output of pig iron stayed at a low point.

Meanwhile, China's crude steel production was pushed up in the international market and the iron ore price has been pushed up since the end of last year. Now the iron ore spot price has hit a historic high of $200 per ton and its index price has reached approximately $180 per ton, he said.

Wu said that as a national strategic resource, it is necessary to have iron ore reserves established by law and written into policy. He suggests the country establish a special agency to manage iron ore reserves.