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Iron Ore-trading Pattern is Changing

Iron Ore- trading Pattern is Changing


 
          
 
FOB or CIF might become obsolete terms for iron ore trading in China soon. 
 
Following Vale's efforts with Port of Qingdao to set up a ore blending &  exchange,  an iron ore supermarket in China, MINMETALS teams up with COSCO Shipping, Port of Caofeidian, Hebei Steel and Shougang Steel to set up an exchange centre at the port of Caofeidian. The facility will provide bonded services, warehousing, ore blending, spot and future trading to Chinese buyers, the fundamentals behind this are shippers, steel mills do not have to worry about the shipping freight which is very volatile, and saving their time of deposit/transit for up to 2 months, and if steel mills or traders like, they can trade on the futures which the facility can provide a clearance service. and it might go further down to INTERNET as well.

 
With more expected to come, believe the whole trading pattern might change, which means shipping company's customer base might be somebody else, not necessarily the steel mills... 

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