China urges firms to boycott Australian, Brazil iron ore
ING (AFP) - A Chinese industrial group has urged domestic steel companies to stop buying iron ore from the worlds top three miners in protest over an alleged price monopoly, state media said Monday.
The China Iron and Steel Association has asked domestic steel firms and traders not to import iron ore from Australias Rio Tinto and BHP Billiton and Brazils Vale for two months, the China Net, a government news website, said.
China has 75 million tons of iron ore reserves and production of the resource by Chinese mines was up by 18 percent year-on-year during the first two months of 2010, the report said.
At present our steel enterprises have ample supplies of iron ore to ensure normal steel production for two months, the report quoted association head Shan Shanghua as saying.
The association called for the boycott on Friday as the most effective means to fight the monopolistic behaviour of the three iron ore giants, the report said.
Australian Trade Minister Simon Crean responded by calling on Beijing not to interfere in the market.
Youve got to let the market determine the price. You cant be issuing directives in terms of restricting supply, he told ABC Radio.
Crean said a boycott was unlikely because demand for iron ore was so high from rapidly industrialising China.
Rio Tinto refused to comment on the report while BHP was unavailable.
China is Australias most significant two-way trading partner, with total trade between the countries valued at 76.4 billion US dollars during the last financial year.
According to press reports, Asian steelmakers like Japans Nippon Steel and South Koreas Posco have already accepted massive hikes in iron ore prices this year of up to 90 percent.
Agreements by the Asian steelmakers in the iron ore talks have previously served as a benchmark in global negotiations.
Chinas commerce ministry told reporters last month the state would support domestic steel mills in their thorny iron ore price negotiations even after Canberra bluntly told Beijing to stay out of the talks.
As the worlds largest iron ore consumer, the interests of Chinese steel mills should be reflected in the negotiations, commerce ministry spokesman Yao Jian told reporters.
For the first time in decades, Chinas steel industry and the mining companies failed in 2009 to hammer out a deal on prices.