(Bloomberg) — China may be the world’s biggest buyer of iron ore, but even that powerful position doesn’t mean that Beijing can succeed in dictating prices for the steelmaking ingredient, said the head of No. 2 producer Vale SA.
The comments by Vale Chief Executive Officer Eduardo Bartolomeo come as China has appeared to ramp up its decades-long struggle to wrest more power over the iron ore market from Vale and its two Australian rivals, BHP Group and Rio Tinto Group, which together dominate global production.
A new centralized iron buyer, created last year to make purchases for the nation’s massive steel industry, has in recent weeks criticized iron ore prices as too high, and called for an improved pricing system. Separately, China’s top economic planning body has intensified a campaign seeking to cool a market rally this year.
But Vale is confident that prices will continue to be set by the balance between supply and demand, Bartolomeo said in an interview. And for the miners that’s good news, with the CEO predicting an increasingly tight market going forward. Vale on Tuesday said it expects to keep production little changed next year.
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