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China-Australia relations: miner Rio Tinto questioned by China steel association over ‘unreasonable’ iron ore prices
- China Iron & Steel Association is looking into whether miners have deliberately restricted supplies to send prices soaring
- Price of iron ore was about US$153 per tonne on Wednesday, after reaching nearly US$160 a tonne last week – about double the price at the start of 2020
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With Beijing questioning major miners on their role in record-high prices that are squeezing steel mill margins, Anglo-Australian iron ore miner Rio Tinto says it expanded its iron ore shipments and on-demand sales to meet increased demand for the steelmaking ingredient in China this year.
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On Tuesday, China Iron & Steel Association (CISA), the domestic steel industry association, held a video conference with Rio, one of China’s biggest iron ore suppliers, days after an online meeting with rival miner BHP, and said the current ore price was “unreasonable”.
That price stood at about US$153 per tonne on Wednesday, after reaching nearly US$160 a tonne last week – about double the price at the start of the year.
CISA questioned whether miners had deliberately restricted supplies to send prices soaring. However, commodities analysts said factors such as buoyant demand for steel production, as well as speculation in iron ore futures on the Dalian Commodities Exchange (DCE), had also contributed to the high prices.
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Nonetheless, the price spike has turned heads in Beijing’s policymaking circles, with some seeing it as a threat to industrial security – a highlight of President Xi Jinping’s newly released long-term development vision, according to analysts.
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