China's new spot iron ore trading exchange has signed Brazilian miner Vale as its founding member as it moved a step closer to exerting China's influence on iron ore prices.
China Beijing International Mining Exchange (CBMX) and Vale, the world's largest iron ore exporter, signed an agreement in the port city of Qingdao today.
CBMX will officially open business in May. It is backed by major Chinese steel mills and traders in a bid to enhance China's power in price negotiation. China is the world's largest iron ore importer.
Today's signing has left BHP Billiton of Australia as the only one of the world's top three iron ore suppliers that hasn't joined the Beijing platform. Australia's largest ore producer Rio Tinto signed up last month.
BHP, which backs a similar trading exchange in Singapore, said it's positively studying participation and is "in principle supportive of any platforms that support market transparency and liquidity."
Vale, Rio and BHP control the bulk of the world's seaborne iron ore trade. Two years ago they broke with a decades-old custom of annual iron ore pricing following Chinese opposition. Vale exported 130 million tons to China last year, about one-fifth of China's total iron ore import.
Fortescue Metals Group Ltd, Australia's third-largest iron ore exporter, is the first foreign member of CBMX.