MIIT: China side still holds iron ore negotiation bargaining chip
Jia Yinsong, inspector of Ministry of Industry and Information Technology's raw material department strongly said that China's market demand is the greatest bargaining chip facing the increasingly clear quarterly pricing mechanism, index pricing mechanism, and China still holds the bargaining chip of insisting on iron ore long-term contract price.
He stated that the three big ore miners' performance actually forced downstream to develop substitutes. When iron ore price remains high level, domestic iron ore development expense will be significantly increased, from now on, China will greatly increase home-made ore and preferably use domestic ore.
Jia Yinsong said that he does not support the transaction of iron ore financial derivative products. He noted that in fact iron ore index is financial derivative, and the financial crisis is resulted from financial derivative products. He believed that once iron ore trade is carried out according to price index, the market will cook index in 2010, which will continue pushing up iron ore raw material price.
