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PrintBeijing Business reported that Corporacion Venezolana de Guayana has agreed to supply Wuhan Steel 8 million tonne per year of iron ore at a price USD 6.5 per tonne lower than the market price.
The report quoted Mr Deng Qilin GM of the mill as saying that the company has singed a five year contract with the Venezuela supplier in November however, it has not revealed the supply tonnage and price terms immediately. Instead, it described the deal as the first one to be implemented at Chinese price, which is lower than the benchmark price settled by Big Three.
Mr Qilin said that "We would continue talks with the leading ore miners, and seek opportunities for investment in both domestic and foreign ore mines. In three to five years, Wuhan Steel would make significant progress in diversifying iron ore supply.”
Mr Qilin optimistic view is echoed by Mr Lei Pingxi secretary general of Metallurgical Mines Association of china who predicts that domestic supply and equity foreign ore would be able to meet 70% of total demand by 2015.
The agreement may pave the way for China to set iron ore prices separately from the rest of the world and exercise its bargaining power as the largest buyer. Chinese steelmakers and the world's three biggest iron ore suppliers have failed to reach a price accord this year.
Sourced from Beijing Business
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