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SBB Special Report: CISA finally publishes iron ore index - 12 October 2011

The China Iron & Steel Association (CISA) has finally published its China Iron Ore Price Index (CIOPI) – the index it hopes Chinese mills and foreign iron ore suppliers will use in price negotiations. But questions remain.

Despite having vowed previously that the first official CIOPI data would be published every Monday starting October 10, in fact CISA did not post the numbers on its website until Tuesday, Steel Business Briefing notes.

The CIOPI sets its benchmark at 100=April 1994 and computes a single index from two sub-indices, one for imported 62% Fe fines and the other for domestic iron ore concentrate, also 62% Fe. But as China was shut for holidays last week and very little trading was done, the domestic concentrates sub-index was left blank this week.

Thus Tuesday’s sub-index was for imported fines for the week of 3-10 October. It was given as 652.41, down by 0.13 or 0.02% from the week of 26-30 September. CISA has repeatedly refused to disclose its index methodology.

Imported 62% Fe fines were sold to China at $176.22/dry metric tonne cfr last week (equivalent to RMB 1,310.21/dmt), down $0.03/dmt or RMB 0.26/dmt from the last week of September, CISA said. To arrive at its price CISA uses spot contract prices from eight Chinese sea ports and other industry data, as SBB has reported.

CISA has long been advocating the need for its CIOPI, insisting it will arm the Chinese steel mills in quarterly or monthly price negotiations with the world’s top miners and provide an alternative to existing iron ore price indices, all published by overseas institutions. Yet CIOPI being embraced as the global benchmark seems unlikely when – for now at least – no English version of the site appears.

Like other Chinese organisations publishing iron ore indices such as state-run news agency Xinhua, CISA also collates port stocks data. However, CISA’s latest port inventories data are as of end-August – given as 95.21m tonnes – and the comparison is only year-on-year, not the more useful month-on-month.

CISA's China Iron Ore Price Index (CIOPI)


Source: CISA

 

Oct 3-10

Sept 26-30

W-o-w change

CIOPI


580.73


Sub (domestic ore)


455.81


Sub (imported ore)

652.41

652.54

0.02%

 

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