China is world’s largest consumer of Iron Ore. And also China is among the world’s largest producer of Iron Ore also. Due to the policies of mining giants of the world in terms of prices for long term contract, China has declared to launch its own iron ore price index this October 2011, to control the global prices of Iron Ore.
The index will cover two markets, one for the domestic iron ore produced and the other for the iron ore which is imported to China. The Price index will be contributed with regards to China Chamber of commerce of Metals, Minerals and Chemical Importer and Exporters, China Iron and Steel Association and Metallurgical Mines Association of China. It will use the Iron Ore prices of April 1994 as base for calculating the fresh market price.
The Prices also will be calculated on the basis of data collected from the major ports in China which are being used to import Iron Ore regularly. For the domestic price index in China, prices from 14 provinces will be collected. This index will help the Chinese importers to compare the prices of iron ore being imported from Australia, India and Brazil.