China’s campaign to lower iron ore prices may produce the opposite effect as major miners consider merging assets. Analysts suggest a Pilbara alliance could strengthen miner bargaining power against China’s purchasing consortium.
China’s Price Strategy Faces Potential Backfire
China’s efforts to force down iron ore prices could inadvertently keep prices elevated or push them higher, according to financial analysts. The newly formed China Mineral Resources Group (CMRG), which coordinates over 85% of China’s iron ore purchases, has been demanding price reductions and payment in Chinese currency rather than U.S. dollars.