CHINA'S first iron ore price index was published yesterday in order to provide some reference to domestic steel mills, which are the world's largest buyer of the steel-making ingredient.

The China Iron Ore Price Index, published by the China Iron and Steel Association, comprises two sub-indexes to track domestically-produced ore prices and import prices respectively.

In the first week of this month, the import price index was at 652.41, down 0.13 point from the previous week, according to CISA. The domestic price index was flat at 455.81 because there was no trading locally during the week-long National Day holiday.

The iron ore index is based on the level of 100 points in April 1994.

"We expect iron ore prices to come under downward pressure in the fourth quarter," a Standard Bank report said. But still the bank expects prices to "remain at fairly healthy levels relative to the cost of production."

China is the world's biggest buyer of iron ore, the key ingredient used to make steel. The self-produced price index could give steel mills a guide to their imports. The world's major iron ore suppliers include Australia's BHP Billiton, Rio Tinto and Brazil's Vale.

Zhang Changfu, a vice chairman of CISA, said in August that Chinese steel firms paid US$16 billion more for iron ore imports in the first half of this year because of higher prices.

Source:shanghaidaily