NEWS CENTER

China studies measures to curb soaring iron ore prices

2021-10-22

The Chinese government is paying close attention to soaring iron ore prices and is studying measures to expand supplies to curb prices, a Chinese steel industry insider said on Tuesday, in a move that could affect Australia's massive iron ore exports.

"We believe that the supply side is highly concentrated and the market mechanism is not working, so we call for the authorities to play a bigger role in the event of market failure," Luo Tiejun, vice president of the China Iron and Steel Association (CISA), said at an industry conference.

Chinese steel industry representatives have been calling for effective measures to strengthen the exploitation of iron ore at home and abroad and improve the reliability of supplies, in a bid to curb rising iron ore prices.

In the first quarter, China's imports of iron ore reached 283 million tons, up 8 percent year-on-year, while the import price averaged $150.79 per ton, up 64.51 percent year-on-year, according to figures released by the China Iron and Steel Association (CISA) on Tuesday. 

Australia has been the major source, accounting for up to 60 percent of China's total imports of iron ore.

Potential measures by Chinese firms to expand supply sources could also affect imports from Australia, as freezing bilateral ties already have the iron ore industry look at more options beyond Australia.

The calls for measures to curb iron ore prices also come as domestic steel prices have kept rising, fueled by iron ore import prices. 

Domestic steel companies are diversifying their sources of supplies from both China and abroad to fend off the impact of over-reliance on any import source.Meanwhile, the exploitation of the Simandou mine in Guinea, with the participation of a Chinese company, is expected to help cut the heavy reliance on Australia for imports.