China's state-backed iron ore giant voices concerns over high prices

sxcoal.com General, Company, Price, International, Iron Ore 2023-11-09 16:59:05

China Mineral Resources Group (CMRG), a state-backed procurement agency, said iron ore prices have reached "unreasonable" levels, negatively impacting Chinese steel mills.

Guo Bin, president of CMRG, emphasized the need for efforts to "improve" pricing systems for raw materials during the China International Import Expo in Shanghai as the elevated iron ore costs were squeezing the profit margins of Chinese steelmakers.

Iron ore futures in Singapore notched a six-month high above $126/t on November 6 following the resilient demand among Chinese steel mills. The global iron ore market is facing a deficit and further price increases are expected, said Goldman Sachs Group Inc. on November 7, a leading global investment banking, securities and investment management firm.

At the same event, a senior official from the China Iron & Steel Association (CISA) cautioned that high iron ore prices could hinder crucial investments in areas such as decarbonization. The steel industry worldwide requires significant expenditure in the coming decades to transition away from its reliance on coal combustion.

Jiang Wei, vice chairman of CISA, said that "the ecological basis for the sustainable development of the iron ore supply chain is increasingly fragile".

Established last year, CMRG aimed to consolidate iron ore imports and bolster China's influence against global mining giants.

During the expo, Rio Tinto Group's CEO, Jakob Stausholm, acknowledged the growing importance of CMRG in the global iron ore industry.

(Writing by Riley Liang Editing by Emma Yang)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

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