Iron ore prices are swinging between optimism and pessimism over the economic outlook in top importer China, but beyond the short-term oscillations a longer-term battle is looming.
China is pressing ahead with a plan to centralise iron ore purchasing, with media reports saying state-owned steel mills are forging a new enterprise to boost their bargaining power.
This is not the first time that China, which buys about 70% of seaborne iron ore volumes, has tried to gain greater control over the market, which moved from a long-term contract basis to being dominated by spot purchases in a process started in 2008 by former BHP Group CEO Marius Kloppers.
The main theme of domestic favourable macro front remains unchanged, SHFE aluminium prices showed a ‘v-shaped’ rebound today
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Two contrast sequences set to boost China’s aluminium smelters’ profitability, offsetting tariff losses. What are they?
