A new state-owned company called China Mineral Resources Group (CMRG) is poised to become the world's largest buyer of iron ore as soon as next year, when it will start buying on behalf of the top 20 Chinese steelmakers, including the leader China Baowu Steel Group Corp.
Sources reported that CMRG has started negotiating supply contracts with leading manufacturers Rio Tinto Group, Vale SA and BHP Group.
China's move to consolidate purchases for its giant steel industry will give CMRG unprecedented bargaining power in iron ore, and the new company plans to cut current market prices. This is the latest in attempts by China, the #1 buyer of nearly every major commodity, to increase its influence on global markets and pricing.
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