China Discussing Index-based Ore Pricing System

China's steel community is talking about the prospect of an index-based iron ore pricing mechanism. A senior executive in Shanghai said China has to come to realize that there is a general trend to peg iron ore prices to a certain index-linked systems under the background of both the chronic short supply of iron ore and the frequent flows of international capital. It's necessary for the domestic sector to devise an iron ore price-setting formula of its own.

Changes in ore prices have never been more frequent, said Luo Bingsheng, CISA vice president. This, Mr Luo believes, is due in part to the flaws of the Platts index that has been in use for the past nine months. As for the much-concerned Chinese index , he said that the plan is still under study.