xstrata v hanlong, page-28

This article was posted on the 23rd july 2011 and i have used google translator to convert it, not sure how accurate it is....i have also added the link for people who can understand chinese text

http://www.cfi.net.cn/(4wl0an45av4pbofeh4sjnl55)/p20110723000187.html
___________________________________________________________Iron ore prices have rushed $ 180 / t high, loss of influence has reached the price of two years to start planning for the Chinese government and enterprises to re-affect the pricing of iron ore imports.
Reporters learned that China Steel Industry Association (hereinafter referred to as CISA) and the mining association is studying the "official" standard of the iron ore price index, in order to comply with the sellers of iron ore price index Platts compete. At the same time, by the National Development and Reform Commission and the State Development Bank to support the Sichuan Han Lung Group, is planning a comprehensive listing of corporate acquisitions in Australia, iron ore exploration and development business Sundance Resources Ltd. Corporation (SDL), and SDL with Africa Mine is the world's third largest undeveloped iron ore district.
Already well-known steel mills in China and the Chinese Dragon Group "secret talks", planning to return to long-term iron ore price negotiations agreement era. China ready buyer price resistance.
Loss of iron ore pricing and wins
Platts Energy Consulting Asia Pacific Business Development Director Hua Dawei can answer questions in fluent Chinese, the Asia-Pacific headquarters in Singapore, he personally edited a variety of energy and steel, information sent to the reader, now Huatai Wei ushered in a piece of good news.
"Platts Treasure Island next month to launch the Chinese domestic prices of petrochemical industry information." Informed sources told reporters that the information has been confirmed Treasure Island people.
This is the second launch of Platts recognized by the international iron ore giant iron ore price index, the domestic commodity prices once again permeate the system.
A year ago, China as the biggest buyer of iron ore, worked with three major iron ore giants BHP Billiton monopoly, Rio Tinto and CVRD for iron ore long-term agreement price negotiations. However, due to serious differences between prices, makes exceptionally deadlocked negotiations, repeated delays, the final overthrow of the negotiations altogether iron ore giant system to world-renowned third party Platts and TSI (Global News Group's production of iron ore steel price index) Iron ore benchmark prices, based on the index price.
After each quarter, the steel price the seller will receive notification of iron ore, without negotiations, China may thus lose the game.
A few weeks ago, that steel, Platts and TSI for an integrated acquisition of control of Platts global steel information TSI Group, the original price of the development of two international neutral third party who has now become a pricing ability to further focus.
In fact, the outside view, "S & P's parent company is a listed company, with 100 years of history, is an internationally renowned independent third-party information agencies, through the acquisition of TSI can reduce their own similar information for research institutions to establish the time and effort, so acquisition is normal, Platts price index is still credible. "Treasure Island analysts Zhangyong Kai told reporters.
But eating three iron ore giants monopoly of the Chinese steel industry have suffered skeptical.
In 2008, iron ore giants BHP Billiton to advocate an end to the long-standing iron ore price negotiations, then, BHP Billiton China, a senior told reporters that the Platts price system, they are recognized. However, the Platts price index, China Steel Association does not agree that the price of foreign bodies from the actual situation in China.
Reporters from a large steel mill was informed insiders, "and Steel Association was developed jointly by China Metallurgical Mines Association, the price index, but which encountered many difficulties."
At the same time, Lange Steel Information Research Center, China United Steel Net also launched its own price index, but the market is seldom used.
The plight of China Steel Association Index
Want to get rid of the current price system is not easy. Development and Reform Commission, the Ministry has urged China to put its own price index, and hopes of the Steel Association.
"We study these indices lack of talent." A Union has been involved in the metallurgical and mining associations of steel index pricing revealed to reporters.
The source also revealed to reporters Steel Association, the difficulties faced by developing indices, "Steel Association has been leading negotiations on iron ore Baosteel, the Steel Association is not a neutral third party to, such price index drawn up and will not be recognized . "
Secondly, the "Platts is the port of Qingdao spot price as a benchmark, and TSI is the Tianjin Port's iron ore price benchmark, but the Association would like to China's domestic steel ore price, whichever is mine, this is obviously not a representative of , because the low taste of China's ore, steel mills and freight destined for each mine is different, it is difficult to calculate. "
In addition, "you can see is that the original Steel Association has never admitted that the spot market, traders in the speculation that it is now in the steel price index in the study of the Association, is recognized on the spot market, but now we have a lack of researchers , can not explain the reason, the reason can be both buyers and sellers to accept, are unknown. "
Lange Steel Information Research Center, Chen Kexin that "the establishment of China's iron ore price index, must be entrusted to domestic third party, preferably professional information institutions. The domestic steel industry and its institutions, associations should pay attention to avoid arousing suspicion. With this Meanwhile, the integration of the domestic iron ore price index, not everywhere. "
Return "long price agreement"?
National Development and Reform Commission and has been CDB mining policy to encourage the Chinese dragon will become China's S & P index price break of a breakthrough, Chinese Dragon Mining is expected to control in Africa, the world's third-largest iron ore resources. Brazil and Australia's iron ore has been Rio Tinto, BHP Billiton, CVRD and FMG controlled.
Once completed the acquisition of Chinese Dragon Mining and production, then China will have nearly 30 percent of imported iron ore from the Chinese dragon, iron ore price monopoly will be broken.
July 15, Chinese Dragon Mining has been made to the SDL wholly tender offer, the purchase price of A $ 0.50 per share, the acquisition of the total amount of about 1.44 billion Australian dollars. "It was progressing well, once the acquisition is successful, we will become the world's fifth largest iron ore company." O'Hanlon Mining president Xiao Hui told reporters, SDL African iron ore resources have ranked third in the world, "we will long-term agreement to sell iron ore prices the way, if the three major iron ore sellers turn to us for a common price fixing, we will naturally not as a Chinese company to follow, and break the monopoly. "
Xiao Hui also said, "have a lot of Chinese steel mills to get in touch with us, to discuss future cooperation model."
Xiao Hui calculated for the correspondent, and now the production cost per ton of iron ore in the 40 to 50 dollars, but the CIF has reached 180 U.S. dollars / ton. "For the three major mines, the ore is like printing money as well."
Hanlon African iron ore mining future sales of the model will be, "We signed a long-term agreements with steel mills to less than three major iron ore prices generated by the current pricing model, about the low tens of dollars per ton price to sell. "
This was the earlier repeal of the three major iron ore sellers long-term iron ore price agreement the same pattern.
Chinese Dragon Mining steel this model has been echoed, "A lot of steel in cooperation with the things we are talking about." Moreover, as O'Hanlon and other important mining holds the rail transportation of resources, "the railway and dock in exchange, but also will get more iron ore to China, breaking the monopoly of the big three iron ore just around the corner. "
According to the plan, the perfect picture will appear in 2014.
Lange Steel Information Research Center, Chen Kexin that, in a breakthrough, it should also improve their own market, will China become the world iron ore trade center, will increase China's right to speak, "need to foster large-scale iron ore markets, including futures wholesale spot market, both with large, should also welcome the establishment of the world's iron ore mining giant distribution center in China, these market transactions bid price listing day announced, both parties are visible, there will be no objection . "(. in. country. by. camp. net. cable. cold. Snow)
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