From Reuters, BHP responds to China:
“We aim to improve transparency by increasing liquidity in the spot market,” BHP said in a statement e-mailed to Reuters.
“We sell significant volumes on a spot basis, including through widely accessible trading platforms, irrespective of the iron ore price,” it said.
Spot market trades are used to set index prices, which producers andsteel mills in turn use as benchmarks for pricing monthly and quarterly iron ore supply contracts.
“It’s more the art of war than manipulation,” said a commodities analyst familiar with the way Australian iron ore miners price cargoes to China.
“Both sides use the pricing mechanism to their advantage and it’s a big money game. If you can extract another 10 dollars per tonne out of your ore, that’s a significant margin to make.”
In response to the planning agency’s specific allegation that some miners were buying iron ore cargoes on the spot market in order to lift prices of the key steelmaking material, BHP said it was “very normal” for steel mills, traders and producers “to both buy and sell cargo to balance their books”.
“Such transactions occurring on the platforms is to the benefit of all market participants in that it supports transparent market pricing and market liquidity,” BHP said.
BHP bought 100,000 tonnes of iron ore in January in a rare move that market participants saw as a strategy by producers to stem a decline in prices.
“We will not comment on what transaction we have or have not done,” the company said on Thursday.
I wonder where this is going. Nowhere good.
any bhp types in shanghai are gunna know what shanghaied means.
run away run away.
BHP shareholders, why don’t you all be a bit more generous and send Kloppers on a retirement holiday to Shanghai?
So if I bid on my own item on eBay they ban you. If a fund manager pumps the price up then dumps it for a gain there’s big trouble. Why are commodities treated so differently?
My 2c worth – I can’t see why an iron ore producer shouldn’t be an iron ore trader as well, if they think they can make an extra quid doing so.
If the boot was on the other foot and China was a big exporter, you can bet they would be doing it.
They’re in this up to their necks.
As significant stockpilers of the stuff if they aren’t selling excess holdings into the market cum contract negotiating time to influence price down, then I’m walking north with a leaking waterbag.
“BHP bought 100,000 tonnes of iron ore in January in a rare move that market participants saw as a strategy by producers to stem a decline in prices.”
So BHP (and presumabley Rio and Vale as well) have been selling some of the ore moving through Chinese ports TWICE.
100,000 tonnes is less than one day’s production, it’s hardly going to move a market.
So why did they do it?
And is that figure the whole extent of it?
Massaging some one lef-tee??
Who was selling to ‘em??
weirding me out.
cos BHP like a honey badger at these price levels.
h/t ???? for honey badger?? crap I’ve forgotten. V V sorry.
Eithèr the number is wrong, or they are just “practising”, getting their systems in order as a test run for the main game of becoming something like Glencore.