Some major players in China’s steel sector, which produced nearly half the world’s steel in 2009, have asked Premier Wen Jiabao to direct the government to tackle iron ore price negotiations.
The reply from Australian Trade Minister Simon Crean said, "We recognize China’s market economy status, all we ask in return is that it acts in accordance with market principles." That is a very polite way of asking the government to stay away.
Crean said Chinese steelmakers locked in talks with Australia’s two biggest iron ore miners, Rio Tinto and BHP Billiton over pricing of hundreds of millions of metric tones of ore for delivery over the next 12 months "should not seek to get government involved."
The vice president of the China Iron & Steel Association (CISA) and the heads of more than 10 mills wrote the joint letter to Wen on March 11, asking him to take up the issue of rising iron ore import prices at a national level.
Commenting on this Simon Creqan said, "The iron ore negotiations are always going to be robust negotiations,"adding China was helping ease supply shortfalls by investing in local iron ore mines.
ABC News reported that Crean said, "There are a number of ways this issue can be addressed, but it won’t be addressed by governments intervening in the marketplace.
"As for the steelmakers, in terms of them being dissatisfied with the way negotiations have been run in the past, the solution doesn’t lie in getting the government to intervene."