RE: China vs. Iron Ore17 Dec 2020 11:14
Hi Longlad,
Pricing in RMB would be an 'interesting' move (not least for the examples you quoted of would-be adopters), but the 3 x interviews in the article all mention that the effect of 'demand' on market price has been exaggerated by speculative trading, so that seems the more likely, at a guess.
..CISA held a similar discussion with BHP last week while also calling on Chinese regulators to investigate a spike in prices on the Dalian Commodity Exchange, saying there were signs that speculators had driven up prices of derivatives and this had spilled over into actual iron ore prices.
Rio Tinto acknowledged the strong demand for iron ore and the challenges of volatile prices, saying it was willing to work with China to improve the pricing mechanism.
In comments to the South China Morning Post, Rio Tinto said it was keen on helping its clients ensure that the iron ore market remained open and transparent.
“As examples, Rio Tinto have expanded iron ore sales to ports in China, pioneered port sales of iron ore via a WeChat app, and led the industry in completing fully paperless end-to-end transactions using blockchain technology,” a spokesman said.
While Fortescue Metals Group, another major iron ore supplier to China, has yet to have its regular meeting with CISA, CEO Elizabeth Gaines said the miner was also willing to work with Beijing on market concerns.
“As a low-cost supplier of seaborne iron ore to China, our well-established marketing strategy is centred on the long-term needs of our customers,” Gaines told the Post.
Commodities analysts said it was important that China examine the impact of its economic stimulus policies, as well as the extensive “casino-style” iron ore futures trading at the Dalian Commodities Exchange, on the price of iron ore. Traders have been rushing into asset markets in search of better returns amid a low-interest environment...."
IMO
ATB
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