May 17, 2008

Iron ore price negotiations – Chinese mills eying overseas investment and mergers

Mr Zhang Xiaogang the president of Anshan Steel recently said we need to increase iron and steel capacity, as well as a great volume of mineral resources. However, current mineral resources could only satisfy about half of the demand from China’s iron and steel industry. He said. “Consequently, China is now strengthening the prospecting and exploiting of mineral resources in China. At the same time, many Chinese enterprises are searching for mineral resources in international market in order to enlarge raw materials supply.”

Mr Xiaogang said that the merger and the increase of industrial centralization is a necessary phase of the sustainable development of Chinese iron and steel industry, but every steel enterprise has different views on the schedule. He believed that, however, the aim could cone true and the consolidation of Chinese iron and steel industry should be accelerated in the coming three to five years.