Top ore miners teach Chinese steel mills, traders a lesson in marketing

The world's three big iron ore miners are teaching the Chinese steel mills and traders a lesson in marketing, depriving them of their profits by raising the prices of the mineral by nearly 100 per cent this year.

Even as China cries foul over the Anglo Australian miners BHP Billiton and Rio Tinto and Vale of Brazil for junking the annual benchmark price in favour of quarterly ones and raising iron ore prices by nearly 100 per cent, the country has to look inwards and first discipline its steel industry and iron ore traders.

In the run up to the iron ore negotiations starting in February, China has been repeatedly saying that it has curtailed imports so that it can bargain with the miners from a position of strength to force them to not raise iron ore prices by more than 40 per cent.

But its own latest statistics show exactly the opposite. Instead of reducing its imports, in the first quarter of 2010, China imported 155 million tons of iron ore, up 18 per cent from the same period last year, reveals the the latest statistics released by the General Administration of Customs.

Not only did the iron ore imports increase during the quarter, the total value of the iron ore imports was a record $14.93 billion, up 42.4 per cent compared to the same period last year.

The Shanghai Securities News reported today, citing a person working at the iron ore trading department of a state-owned steel maker, that reselling of iron ore was a lucrative business in China.