Chinese steelmakers and trading houses should try to better understand price reporting agencies’ methodology and contribute their data to improve the accuracy of iron ore pricing, the China Iron & Steel Association said.
“Mills and trading houses should take initiatives to understand the pricing methodologies of the various price reporting agencies and provide their trade data to them, which would contribute to accuracy in the pricing of iron ore,” CISA Vice-Chairman Wang Liqun said at an industry conference in Qingdao, China.
Wang also said he hoped PRAs would listen more to feedback from Chinese entities so that they could carry out their pricing in a fairer and more transparent manner.
Wang also called on buyers and sellers of iron ore — a core ingredient for steelmaking — to adopt a composite grade.
“We should not use only one index for a certain grade. There is room to use two to three indices instead,” Wang said, without elaborating.
Wang said while the there was still a surplus of iron ore supply to China, there was a widening price gap between various grades, namely high grade and medium grade due to market conditions.
Chinese steelmakers, buoyed by strong steel margins, were now chasing high grade materials in a bid to increase their productivity.
The spread between Platts 65%-Fe assessment and IODEX were historically high at $24.20/dmt CFR China on September 21, S&P Global Platts data showed.
China, the world’s largest steel producer, imported 625 million mt of iron ore from January to July, up 7.5% year on year.
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