China Bypassed as Iron Ore Producers Set Prices

Jan. 13 – China has been sidelined by the world’s global mining community as they meet to set annual iron ore prices.

Despite China representing 50 percent of the iron ore market, large global producers Vale of Brazil, Rio Tinto and BHP Billiton of Australia are meeting in Singapore and planning to fix prices based upon discussions with buyers in the Japanese market.

The bench-mark agreement will then be presented to Beijing on a take it or leave it basis reports Agence France-Presse. No discussions have been entered with China’s state owned steel mill, Baosteel, and the companies  have stated they have no plans to travel to China to do so.

This comes after reports that China has concluded the investigation on four Rio Tinto executives and turned them over to the local procuratorate for prosecution. The executives have been detained since July on accusations of stealing state secrets.

The decision to cut China out of the annual price negotiations comes as its steel industry struggles from internal disputes over pricing and stock levels. It remains to be seen whether Beijing, by support for the arrest of foreign executives, may have found itself lead into a bind with foreign producers on one hand, and a belligerent domestic steel industry on the other. China frozen out of the global price negotiations altogether, cannot be pleasing to a Beijing determined to acquire raw materials from overseas.