More on China’s plan for iron ore price control (plans a buying cartel)

Any moves to send the price of iron ore lower would impact the Australian dollar (at the margin lower iron ore preices would be a negative input for the AUD).

From yesterday:

• China will set up a centralised iron ore buyer to counter the dominance of Australia

The Australian Financial Review has a follow-up piece (AFR is gated but here it is if you can access it)

AFR is skeptical, citing 3 reasons (this is in brief):

1. rumours China would form a buying group have been doing the rounds for a decade
2. there are doubts whether China could set up and co-ordinate a steel-making cartel. Would the hundreds of little steel producers dotted around the country really maintain discipline? Or would some peel off to do deals of their own when individual circumstances demand it?
3. China is a big part of the reason iron ore prices are so volatile.

The iron ore futures price fell overnight.