China is moving to consolidate the country’s iron ore imports through a new centrally controlled group by the end of this year, as Xi Jinping’s administration seeks to increase Beijing’s pricing power over the industry, reports the Financial Times.
The initiative, led by the China Iron and Steel Association and the planning ministry, involves large state-owned mining and steel groups such as Baowu, China Minmetals Corp and Aluminium Corporation of China, according to people familiar with the effort.
China is the world’s biggest consumer of iron ore with its 1 billion tonne a year steel industry absorbing about 70% of global production, most of it supplied by Australia. Any move to gain control over prices will probably alarm Canberra given iron ore’s status as the country’s top export. Beijing hopes the new entity can secure lower prices through larger bulk purchases made on companies’ behalf.