Nov 24 (Reuters) - China plans to launch its first physical iron ore trading platform next month as part of efforts to gain more control over pricing in a sector dominated by foreign suppliers.

Ma Zhipeng, vice-general manager of research and development at the China Beijing International Mining Exchange (CBMX), told Reuters on Thursday that the new online platform would be formally launched at the end of December.

CBMX will also introduce a new iron ore price index based on completed transactions at domestic and overseas ports, Ma confirmed.

CBMX officials told the China Daily newspaper that the platform would be open to international and domestic iron ore producers, traders and steel firms, but in a bid to deter speculation, banks and financial organisations would not be allowed to participate.

Liang Ruodong, the vice-president of CBMX, said a number of overseas steelmakers have already expressed interest in the platform, which CBMX will set up jointly with the Aluminium Corp of China and the China Everbright Group.

China has long believed that its position as the world's biggest iron ore consumer entitles it to a bigger say when it comes to prices.

Last year, mining giants Vale, BHP Billiton and Rio Tinto ditched the old "benchmark" system in which annual prices were decided through negotiations between buyers and suppliers.

They switched to an index-based system in which contract prices would be adjusted every three months, but China remains suspicious, saying foreign indexes are vulnerable to manipulation and speculation and do not reflect the true state of the market.

The China Iron and Steel Association launched its own price index in October, but few expect it to be capable of competing with established indexes compiled by Platts , Metal Bulletin and the Steel Index .

Source:reuters.com