By Zhang Xiangdong (张向东)
News, page 5
Issue No. 559, March 5, 2012
Translated by Zhu Na
Original Article: [Chinese]

Senior players in China’s steel industry last month gathered in a Beijing conference room to hear about globalORE, a new iron ore trading platform supported by the global mining giants on whom China depends for supplies of the raw material.  

The project has been pushed by Anglo-Australian firm BHP Billiton, which modeled the platform on globalCoal, another online trading platform where consumers and producers submit bid and offer prices for the commodity.

Also in the audience were Vale and Rio Tinto, the two other firms that make up the trio of the world’s biggest miners. Louis Fel, the president of globalORE, says that the platform will make it easier for buyers and suppliers to determine a fair price for iron ore, a goal that could shield those miners from accusations by China Iron & Steel Association (CISA) (中钢协) that they abuse their pricing power.

CISA has backed its own domestic platform for ore trading, the soon-to-be-launched China Beijing International Mining Exchange (CBMX) (北京国际矿业权交易所) and the association has blocked its members from using globalORE.

Executives from CISA and the CBMX were among those listening to GlobalORE president Louis Fel. Also present were representatives of China Minmetals (五矿集团) and Sinosteel (中钢集团).

"We won’t consider a foreign online trading platform. China is the world's largest iron ore consumer, and has also established its own online trading platform, and soon we will be starting formal operation and trading," CISA vice president Wang Xiaoqi (王晓齐) told the EO.

The country’s 26 most influential steel mills and traders, who include Baosteel, Angang Steel and Sinosteel, are founding members of the China Beijing exchange, which is expected to start formal operation in June.

Despite China’s biggest steel makers having boycotted globalORE, the platform has made progress with smaller producers. Its technical staff have already installed the platform on computers belonging to Chinese ore traders and smaller steel mills, people familiar with the matter told the newspaper.

Fel is familiar with the position of the Chinese government towards his company’s trading platform, and this is partly reflected in his ambitions for the venture, which he says won’t promote any financial products.

CBMX won’t develop futures, swaps and other financial derivatives either, says CISA’s Wang.

At first, says globalORE, its platform will enable traders to buy and sell five types of ore without revealing their identity to other people on the market.

One person from Sinosteel Iron & Steel Co.,Ltd (中钢钢铁) told the EO, that spot prices for iron ore on trading platforms have already had a major influence on prices.

Links and Sources:
globalORE
globalCOAL
China Beijing International Mining Exchange
China Iron & Steel Association
The Economic Observer Chinese Steel Supremo Rues Weak Position In Ore Negotiations
Reuters UPDATE 1-Foreign miners in talks to join China\'s ore platform
International Business Times BHP to Launch Global Ore Trading System By Year End