The China Iron & Steel Association will start publishing a daily iron ore price index from January next year, a CISA official said Friday.
But the index was expected to have little impact on trading or prices, market sources said Friday.
It was not clear whether the daily index will be a continuation of CISA's existing weekly index, and whether the iron ore will have the same specifications.
CISA started its weekly iron ore pricing index on October 11, 2011. The index is released every Tuesday and comprises a composite index as well as two sub-indices for the imported iron ore fines and domestic ore concentrate.
CISA seeks to give more bargaining power to Chinese steel mills through the weekly and daily index, as China is the world's largest iron ore importer and consumer.
The weekly index, however, is not seen as very useful by Chinese market participants. "We have not checked CISA's weekly iron ore pricing index since its launch even though we have been sent the index ... partly because it is always a summary of the previous week's market instead of reflecting the actual and current market situation," an official from a steel mill in East China said.
Besides there is no proper methodology known for normalizing transaction prices for various grades of fines and concentrates in its index calculation, she added.
CISA's existing two weekly sub-indices are for the 62% Fe-content imported fines priced in $/dry mt on a CFR China basis, and the domestically produced 62% iron content concentrate in Yuan/dmt basis with 17% VAT added.
A Beijing-based steel analyst said CISA's move towards a daily iron ore pricing index is more to fulfill its own promise back in 2011 to release "an independent iron ore index that can be called China's own," than to set up a pricing benchmark in the Chinese iron ore import market.
China's steel industry imports 70% of its annual iron ore consumption volume.
