12th Rare Earth Summit
May 27-28, 2021
Hangzhou, Zhejiang, China
11th Aluminum Raw Materials Summit
May 20-21, 2021
Hangzhou, Zhejiang, China
9th Magnesium Summit
April 15-16, 2021
Hangzhou, Zhejiang, China
13th World InBiGeGa Forum
March 25-26, 2021
Hangzhou, Zhejiang, China
7th World Antimony Forum
June 13-14, 2019
Changsha, Hunan, China
7th Refractory & Abrasive Materials Summit 2019
May 23-24, 2019
Qingdao, Shandong, China
10th Aluminum Raw Materials Summit
May 16-17, 2019
Zhengzhou, Henan, China
11th Rare Earth Summit
May 9-10, 2019
Qingdao, Shandong, China
8th Magnesium Summit
April 11-12, 2019
Zhuhai, Guangdong, China
12th World InBiGeGa Forum
March 14-15, 2019
Zhuhai, Guangdong, China
6th World Manganese & Selenium Forum
May 21-22, 2018
Hainan Sanya, China
Interview with Li Lanki, a veteran of iron and steel industry
Li Lanki, the industry veteran, has 25 years’ work experience in metals and minerals trade. He has worked in renowned international multinational companies (MARUBENI, BHP) in Hong Kong for 20 years, specializing in international trade of the supply of steel and mineral resources to China. He is well aware of foreign trade policy to Chinese part, deeply concerned on China's current situation of the iron ore trade
Background: China Iron and Steel Association (CISA) lifted ban for their members to import iron ore with less than 60% Fe content. The ban covers the traders, but does not include steel mills and mills’ related licensed agencies. At present, Chinese eligible importers include 42 traders and 70 mills. On April 10, CISA called on Chinese steel enterprises to resist the three mining giants by stopping import in next two months.
Li Lanki: Absurd ban on import of lower grades iron ores than 60% Fe
----Interview with Li Lanki, a veteran of iron and steel industry
Asian Metal: Good day, Mr Lee! Thank you for taking the interview of Asian Metal. Currently, CISA released a ban on import of iron ore with less than 60% Fe content, meanwhile the association called on mills to stop imports from overseas mining giants for two months. What do not think of the ban and the call to stop import
Lee: The three mining giants use various tricks on China for iron ore supply restrictions, prices increase etc, as we all know. With no alternative, China imports many Indian iron ores instead. However, the Indian government limits the export of high grade mineral products strictly for their own interest, which leads to a worse situation for Chinese steel enterprises. Chinese mills have to buy low-grade iron ore in order to maintain production. That is also a breakthrough of the three mining giants’ monopoly, It is the real cause we have to import low-grade iron ore.
To remove the obstacle, India, foreign exporters distribute the ban prohibiting imports of iron ore with less than 60% Fe content. In this way, the price of iron ore with higher than 60% Fe content booms, and three mining giants play both ends against the middle. This ban seems to benefit China apparently, because everyone knows how good high-grade ore is. However, what is under the ban? If this proposal is really offered by the Chinese, the proposer is comparable to our historic Majesty, Emperor Hui of Jin. When Emperor Hui heard of people without food to eat, he said, "Why not eat meat instead?” Fortunately, this person is not the emperor, or he will say, why not live in the palace, now that people have no house! Why not find court ladies, if without money to get married! Compared with the majesty, people are so stupid for they can not tell good or bad!
As for stopping iron ore imports for two months, this is also an insidious trick. For the time being, the three mining giants have some problems with supply. If stopping import for two months, Chinese steel enterprises will deplete own inventory, while three giants restore a good supply system and take this time to lift the price in a large scale for enormous profits. The proposal seems to boycott the three major mining companies, but actively cooperates with mining giants’ plots.
Asian Metals: Baosteel announces steel prices of May which is up RMB300-600/t from that of last month. How do you think major steel mills’ price adjustment during the negotiation?
Li: On the price increase of Baosteel, an authority of CISA once expressed his view, "Under the market economic system, mills gain so low profits. How come the price adjustment of Baosteel, an enterprise, is blamed? is it fair and reasonable? Should I say, the range of price increases were not enough! " The price increase of major mills is supported by the official association.
Nevertheless, the point is the background of price increase. China is at a very bad situation in current iron ore price negotiations. I think we can not simply attribute the bad situation to the foreign being too cunning. I believe the Chinese are working hard to negotiate with the foreign for the best and talk strategy with wits.
Baosteel should joint all domestic steel companies for the rights we deserve, under the wise guidance of CISA. However, at the key moment of the game, Baosteel moves up prices with great fanfare once again. It cooperates the foreign to achieve the goal of price surge by concrete actions. To borrow a saying, "This act achieves the effect that class enemies want to but can not do,"
Asian Metal: Chinese iron ore negotiations lost over the years. Can you talk about the reasons for the failure?
LI: Firstly, it is the historical reasons. In China, information is highly concentrated. Metallurgical industry, as an important basic industry, its development of scale, pattern and speed should be comprehensive planned and controlled, including iron ore and other raw materials supply. I think there are three important sectors for serious dereliction of duty: the State Planning Commission (now NDRC), the National Bureau of Statistics and the Ministry of Metallurgy (dissolved). In spite of the long-term statistics of China's iron and steel production, it does not play a role on the overall planning, including the supply of raw materials facing the soaring steel capacity.
Second, CISA works vigorously, but things do not turn out the way it wants. Chinese negotiations camp is not uniform. For own interests, importers including steel mills would rather help the foreign and seek their own systems to help.
Asian Metal: This year's iron ore talks are still worrying. Since the Spring Festival holiday, the price of imported iron ore has increased by 42%, and shows signs to set a new record. Under the unfavorable situation, what efforts can be done to get rid of the plight for the relevant functional departments and Chinese steel enterprises?
Lee: In order to break the monopoly of overseas mines, I thought of following two approaches:
The first method is the total abolition of iron ore import licenses.
According to Chinese incredible iron ore import regulations, a lot of steel mills, especially private ones, have no right to import iron ore, and need to buy it from large steel enterprises or so-called qualified iron ore importers. Under the provisions, inequitable distribution and jobbery emerge endlessly. The original intention of the provision is to gain maximum benefits through Chinese licensed companies' expertise. Nevertheless, the result is just the opposite. Not a few licensed importers make full use of the qualification and the power to get enormous private interests, regardless of national interests, which helps overseas suppliers finally complete their monopoly of Chinese iron ore market.
I propose to eliminate the qualification of iron ore imports with improved relevant policies and regulations. Each of our steel mills, regardless of size, has right to import iron ore and negotiate with overseas exporters, in order to break mining giants’ monopoly.
The second method is to import iron ore by one group, just like what Japan, Korea and Europe do. We can set up one iron ore importer, consisting of staff all over the country elected by China's steel enterprises. Meanwhile, the group must have reasonable supervision.
Asian Metal: Thank you, Mr Li. Thanks for accepting our interview. We hope your company and your business is booming.
Lee: Thank you!
Lee: The three mining giants use various tricks on China for iron ore supply restrictions, prices increase etc, as we all know. With no alternative, China imports many Indian iron ores instead. However, the Indian government limits the export of high grade mineral products strictly for their own interest, which leads to a worse situation for Chinese steel enterprises. Chinese mills have to buy low-grade iron ore in order to maintain production. That is also a breakthrough of the three mining giants’ monopoly, It is the real cause we have to import low-grade iron ore.
To remove the obstacle, India, foreign exporters distribute the ban prohibiting imports of iron ore with less than 60% Fe content. In this way, the price of iron ore with higher than 60% Fe content booms, and three mining giants play both ends against the middle. This ban seems to benefit China apparently, because everyone knows how good high-grade ore is. However, what is under the ban? If this proposal is really offered by the Chinese, the proposer is comparable to our historic Majesty, Emperor Hui of Jin. When Emperor Hui heard of people without food to eat, he said, "Why not eat meat instead?” Fortunately, this person is not the emperor, or he will say, why not live in the palace, now that people have no house! Why not find court ladies, if without money to get married! Compared with the majesty, people are so stupid for they can not tell good or bad!
As for stopping iron ore imports for two months, this is also an insidious trick. For the time being, the three mining giants have some problems with supply. If stopping import for two months, Chinese steel enterprises will deplete own inventory, while three giants restore a good supply system and take this time to lift the price in a large scale for enormous profits. The proposal seems to boycott the three major mining companies, but actively cooperates with mining giants’ plots.
Asian Metals: Baosteel announces steel prices of May which is up RMB300-600/t from that of last month. How do you think major steel mills’ price adjustment during the negotiation?
Li: On the price increase of Baosteel, an authority of CISA once expressed his view, "Under the market economic system, mills gain so low profits. How come the price adjustment of Baosteel, an enterprise, is blamed? is it fair and reasonable? Should I say, the range of price increases were not enough! " The price increase of major mills is supported by the official association.
Nevertheless, the point is the background of price increase. China is at a very bad situation in current iron ore price negotiations. I think we can not simply attribute the bad situation to the foreign being too cunning. I believe the Chinese are working hard to negotiate with the foreign for the best and talk strategy with wits.
Baosteel should joint all domestic steel companies for the rights we deserve, under the wise guidance of CISA. However, at the key moment of the game, Baosteel moves up prices with great fanfare once again. It cooperates the foreign to achieve the goal of price surge by concrete actions. To borrow a saying, "This act achieves the effect that class enemies want to but can not do,"
Asian Metal: Chinese iron ore negotiations lost over the years. Can you talk about the reasons for the failure?
LI: Firstly, it is the historical reasons. In China, information is highly concentrated. Metallurgical industry, as an important basic industry, its development of scale, pattern and speed should be comprehensive planned and controlled, including iron ore and other raw materials supply. I think there are three important sectors for serious dereliction of duty: the State Planning Commission (now NDRC), the National Bureau of Statistics and the Ministry of Metallurgy (dissolved). In spite of the long-term statistics of China's iron and steel production, it does not play a role on the overall planning, including the supply of raw materials facing the soaring steel capacity.
Second, CISA works vigorously, but things do not turn out the way it wants. Chinese negotiations camp is not uniform. For own interests, importers including steel mills would rather help the foreign and seek their own systems to help.
Asian Metal: This year's iron ore talks are still worrying. Since the Spring Festival holiday, the price of imported iron ore has increased by 42%, and shows signs to set a new record. Under the unfavorable situation, what efforts can be done to get rid of the plight for the relevant functional departments and Chinese steel enterprises?
Lee: In order to break the monopoly of overseas mines, I thought of following two approaches:
The first method is the total abolition of iron ore import licenses.
According to Chinese incredible iron ore import regulations, a lot of steel mills, especially private ones, have no right to import iron ore, and need to buy it from large steel enterprises or so-called qualified iron ore importers. Under the provisions, inequitable distribution and jobbery emerge endlessly. The original intention of the provision is to gain maximum benefits through Chinese licensed companies' expertise. Nevertheless, the result is just the opposite. Not a few licensed importers make full use of the qualification and the power to get enormous private interests, regardless of national interests, which helps overseas suppliers finally complete their monopoly of Chinese iron ore market.
I propose to eliminate the qualification of iron ore imports with improved relevant policies and regulations. Each of our steel mills, regardless of size, has right to import iron ore and negotiate with overseas exporters, in order to break mining giants’ monopoly.
The second method is to import iron ore by one group, just like what Japan, Korea and Europe do. We can set up one iron ore importer, consisting of staff all over the country elected by China's steel enterprises. Meanwhile, the group must have reasonable supervision.
Asian Metal: Thank you, Mr Li. Thanks for accepting our interview. We hope your company and your business is booming.
Lee: Thank you!