Warning over high prices

摘要

China's largest steel producer -- Baosteel International -- is looking to form closer ties with the global iron ore industry through the implementation of a two prong research strategy. Firstly, Baosteel hopes the two sectors will "join hands" and look at logistics optimisation. This will involve developing techniques for iron blending at ports, reducing the varieties of ore as well as cut down the cost of logistics. Secondly, joint research will be carried out on ore usage techniques in order to enable the development of iron ore resources at low costs. This will also involve the extension of the service life of primary ore deposits. Overall, Baosteel was expecting the cost to produce steel would increase substantially during 2005. However, as the steel production growth rate in the main downstream sectors was set to fall, mere was no tolerance for higher steel prices and -- as a result -- no room for rising steel prices.