Global miners Rio Tinto Group, BHP Billiton Ltd. and Vale SA, in a testament to China's global influence in the supply and price movements of iron ore, have decided to link hands with Beijing and join the Asian country's new spot trading platform for the raw commodity.
A trader monitors the screen on a trading floor in London January 22, 2010.
Zhang Changfu, vice chairman and secretary general of the China Iron and Steel Association (CISA), announced the development. He said the platform, whose creation was announced on Jan. 16, targets to go online in the first half of the year.
The platform, according to Zhang, will bring together all steelmakers and producers into a common system two years after the global mining companies stopped the customary annual 40-year pricing of iron ore, as well as improve iron ore's pricing power and improve trading transparency, Bloomberg News reported, quoting the China Beijing International Mining Exchange (CBIME), which helped create the online platform with CISA.
"All of the major suppliers will sign accords soon to join," Zhang said. "We expect to create a fair, transparent environment for spot iron ore trading. We'll set up a minimum volume of ore that they should sell through the platform."
"We are positively studying participation and are in principle supportive of any platforms that support market transparency and liquidity," Fiona Martin, a spokeswoman for BHP Billiton Ltd., told Bloomberg News.
Before Rio Tinto Group, BHP Billiton Ltd. and Vale SA, the last iron ore miner to signify interest in China's new spot trading platform for iron ore was Fortescue Metals Group Ltd., Australia's third largest shipper of the raw commodity.
Chinese steelmakers such as Baosteel Group Corp., Hebei Iron & Steel Group, Wuhan Iron & Steel Group, Beijing Shougang Co. and Angang Steel Co. have agreed to subscriber membership into the platform last January, along with traders such as China Minmetals Corp. and Sinosteel Corp., the CBIME said.
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