On October 11th Rio tinto, one of the world’s three biggest producers of structural steel pipe signed its first renminbi-denominated spot.Rio tinto signed the cooperation agreement with representatives of shandong port group rizhao port, and also signed the ore sales agreement with representatives of shanxi gaoyi iron & steel. This is a landmark day in the development of Rio tinto’s mining industry, which further strengthens Rio’s relationship with its Chinese customers, who can be better served by the spot renminbi business.Rio tinto is the second mining giant after vale to accept yuan settlement.Long before Rio tinto, the head of a large international trader in China who had already settled in renminbi told reporters: “we are a credible player in iron ore futures trading in China and provide liquidity.”"The overall iron ore market did well in the first half”.
In July, the price of imported iron ore climbed as high as 955 yuan a tonne, according to the China iron and steel association.At one point, steel prices were hanging upside down, close to the loss point.Since then, iron ore prices have fallen to rmb812 a tonne, with some mills still hovering around profit points. If the steel pipe suppliers are making money, there are not that many requirements.Once the mills don’t make money, they make a lot of demands. The China iron and steel association, which has been advocating for years that iron ore trade be settled in renminbi, has suddenly found a breakthrough, with the second of the big three iron ore sellers accepting renminbi settlement.From the perspective of galvanized steel pipe, it has reduced the exchange and time cost in the process of trade, which not only has a positive impact on the price of bulk trade, but also plays a supporting role in consolidating the position of RMB in the international trade settlement system and stabilizing the value of RMB.
Rio’s move was also under pressure from its old rival, vale of Brazil.Because Brazil is far from China, it needs to pay more cost in dry bulk cargo transportation.So, in an effort to retain customers, Brazil’s vale has been experimenting with renminbi settlement since 2014. The global price of mild steel tube earlier this year after a dam breach left fresh water in short supply.Vale has released significant capacity as capacity has recovered, telling reporters that iron ore powder production reached 86.7m tonnes in the third quarter, up 35.4 per cent from the previous quarter.
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Post time: Dec-22-2020