China in a bid to gain more bargaining power in iron ore markets

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.