Mr. Shan Shanghua, General Secretary of China Iron & Steel Association said on May 20, 2009 that China’s steel & iron enterprises would not concede in negotiation of iron ore product price. He also denied that China had compromised on the previous 40% price cut.
Comment: Negotiation of iron ore product price is approaching the end. However, great disparity between steel and ore enterprises makes the negotiation proceed extremely hard.
Favors on China’s side: 1). China’s status as buyer and the right of speech have been greatly strengthened amid global financial crisis; 2). Depreciation of Australian dollar and Cruzeiro against the US Dollar provides further downside space for price of iron ore product; and 3). High inventory of iron ore product in the ports is an important bargaining chip for China.