Chinese fvck up on ore tactics

[peterpan]

I just love to hear of PRC cock ups, I did a lot of business there in the mid 80's, can't abide their dirty tactics.
Iron ore rises during spy saga

John Garnaut and Barry Fitzgerald

July 16, 2009
IF CHINA'S arrest of mining and steel company executives was designed to spook iron ore prices lower, the move has backfired hopelessly.
The spot market price for iron ore has risen by 10 per cent since China's crackdown on what it alleges is bribery, corruption and espionage in the country's iron ore industry. The crackdown first hit the headlines with the July 5 arrest of Rio Tinto's chief iron ore negotiator in China, Australian citizen Stern Hu.
Reflecting the improvement in iron ore prices, Rio yesterday confirmed a bigger than expected surge in June-quarter shipments of iron ore to China and elsewhere. The surge was a response to a China-led recovery in global steel production and no repeat of the bad weather that hit Rio's West Pilbara operations in the preceding March quarter.
Rio shares gained 98¢, or 2 per cent, to $50.08 on the strong iron ore showing. But Rio managing director Tom Albanese warned that the aluminium market remained particularly tough, saying that earnings from the division in the June half had taken a hit.
It was a combination of the aluminium price collapse and Rio's disastrous $US38 billion ($A48.3 billion) acquisition of Alcan that forced it to strike a $US18 billion refinancing deal with China's state-owned Chinalco in February. Much to China's fury, that has since been replaced by a rights issue and a Pilbara iron ore joint venture with BHP Billiton.
The formation of the iron ore joint venture is another factor said to be behind Beijing's iron ore clampdown as it fears that the Rio-BHP alliance will result in increased pricing power for the producers.
Rio-managed iron ore production for the June quarter was a record 53 million tonnes (Rio's share was 42 million tonnes) from Pilbara mines. This was 47 per cent higher than in the rain-affected March quarter and compares with the 25 per cent increase the market expected.
Several factors have driven the sharp rise in spot iron ore prices, not the least of which is Beijing's dramatic intervention in how the world's biggest steel industry goes about securing its iron ore supplies. A rise in freight rates, reflecting the broader upturn in global economic activity, has also been a factor.
"The traders say they don't have any spot iron ore up for sale and maybe there's a bit of panic buying going on," said Paul Bartholomew, editor of Steel Business Briefing. "It's because they feel the China Iron and Steel Association (it has assumed iron price negotiation powers) will take away their import licences, or otherwise make things difficult, so they're buying while they can," he said.
Mr Bartholomew said the panic buying had driven iron ore spot prices up from $US81 to $US89 a tonne in the week to yesterday.
That compares with the long-term contract price for Pilbara iron ore of $US75-$US80 a tonne, also on a delivered basis, which is down 33 per cent from last year's price.
But the new contract price has yet to be accepted by the Chinese industry. Through the intervention of Beijing and CISA, the push has been for a 40 per cent-plus contract price cut, and the arrest of Mr Hu and others is seen to be part of the pressure play.

[Mr R Sole]

forget the Iron ore...don't forget the Organ harvesting program they have...it's great..forgot to pay your taxes...go to jail...healthy....Hmmm sounds good to us..some rich guy needs your liver....