China will be keeping a close eye on international iron ore price talks scheduled for this year, and hopes that prices will be fixed fairly to achieve a win-win result for producers and consumers, an official with the Chinese Ministry of Commerce said on Thursday.
"China will monitor the progress of iron ore price talks, and take legal measures if necessary to protect the interests of the country and Chinese companies," the official said.
Iron ore prices will influence the growth of the national economy and China's steel industry, which is currently faced with soaring production costs and declining profits. Another jump in prices will put an even larger strain on the industry.
China is against any monopolistic move in international trade.
According to statistics from the ministry, worldwide iron ore reserves are 140 billion tons. If 1.3 billion tons are mined each year, these reserves could last about another hundred years.
Supply and demand are currently in balance, said the ministry. In 2005, a total of 1.25 billion tons of iron ore was used to produce 780 million tons of pig iron. Global iron ore output was over 1.3 billion tons.
China, the largest steel producer in the world, has seen its iron ore imports rocket as its economy maintains nearly double-digit growth.
In 2005, China imported 43 percent of the world's total iron ore export or 275 million tons.
The ministry said China's surging iron ore trade not only brings profits to mining companies, but also benefits the economic growth of iron ore exporting countries and regions.
But some international companies, riding on their monopoly position in international trade, made unreasonably high profits by squeezing out other players.
The ministry said this violated the principles of fair trade and went against the healthy development of the global iron ore trade.
The National Development and Reform Commission (NDRC) is also highly concerned with the outcome of future iron ore price talks.
According to its development policy, the NDRC will control steel output in 2006 by phasing out low-efficiency steel factories.
The move is expected to cut China's iron ore demand by 60 millions tons.
(Xinhua News Agency March 17, 2006)