SHANGHAI, May 26 (Reuters) - China’s steel industry body is considering launching a domestic iron ore price index to compete with the likes of Metal Bulletin and Platts, an official told Reuters on Thursday.
The China Iron & Steel Association (CISA), which has opposed the use of foreign indexes in the setting of iron ore prices, wants its own pricing mechanism to enhance its bargaining power.
Local media said CISA plans to begin with a domestic price index and extend it to imported iron ore at a later stage.
But there is still no specific time frame for the launch of the index, deputy secretary general Li Xinchuang told Reuters by telephone.
“We have done a lot of research into how to make the index in order to guide both the domestic and import market, but there is no time frame yet,” said Li, who is also head of the China Metallurgical Industry Planning and Research Institute.
Global miners Vale , Rio Tinto and BHP Billiton abandoned a decades-old annual pricing mechanism in 2010 and instead adopted quarterly contract prices based on indexes published by Metal Bulletin, Platts and the Steel Index.
While Chinese steelmakers have had little choice but to accept the new pricing system, CISA has continued to question the accuracy of the big overseas indexes, saying they are vulnerable to speculation and manipulation. (Reporting by Ruby Lian and David Stanway; Editing by Jacqueline Wong)