They said it wasn’t going to happen, and it looks like it didn’t. We of course refer to iron ore producers, who have said repeatedly over the past several weeks and months that they would not meet the China Iron and Steel Association’s (CISA) demands for deep cuts to iron ore prices; now, the two sides have officially failed to reach an agreement. CISA’s argument has been that the domestic steel market is so week that price cuts of around 40% are necessary for the industry’s survival. Iron ore producers and the market would seem to disagree: Production is up, and steel makers have been resorting to the iron ore spot market and its relatively higher prices to keep pace with demand. Better performance in the steel industry may be one sign of an economic recovery; another may be new excitement in the property sector. The sale of a residential property site within Beijing’s fourth ring road yesterday to Franshion Properties, for 147% above the reserve price is seen as an indicator that developers are rushing to rebuild their land banks after lying dormant last year. Still, the jury remains out on whether China is experiencing a real and sustainable recovery, and Beijing is doing what it can to keep things moving. Its latest move is a plan under discussion to introduce subsidies for drivers who trade in their old, polluting cars for newer, more efficient models.
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