China mulls establishment of iron ore pricing center to ensure stable prices

China is mulling the establishment of an iron ore pricing center to boost the country's influence in the market, as part of its broad efforts to ensure stable supplies and prices following recent price hikes that had significant impact on Chinese industries. Experts said on Sunday that building a related financial system to enable active online transactions would help gain an upper hand in pricing power.

Xi Zhiyong, general manager of the Dalian Commodity Exchange, said at the 17th China (Shenzhen) International Futures Conference that the exchange will enhance its influence on the prices of important commodities and speed the establishment of soybean and iron ore pricing centers, to serve enterprises in agriculture, steel and other related industries, and ensure supply chain security.

Wang Guoqing, research director at the Beijing Lange Steel Information Research Center, told the Global Times on Monday that through the establishment of a relevant financial system, the online trading of iron ore will become more active, which will have an influence on pricing.

"China, as the world's largest iron ore consumer and major buyer, will witness more contracts and thus its pricing power will be enhanced," said Wang. "Increased pricing power also helps prevent individual iron ore producers from dominating market prices. For China's steel industry, better pricing power can reduce costs and increase profits," she added.