July 27, 2016 / 9:57 AM / 2 years ago

Australian mining group denies iron ore being dumped in China

SYDNEY, July 27 (Reuters) - A leading mining group in Australia on Wednesday denied allegations by Chinese iron ore miners that Australian counterparts were dumping ore at cheap prices to push them out.

“Australian iron ore producers do not engage in dumping of their product,” the Minerals Council of Australia said in response to a Reuters report that more than 20 Chinese miners were calling for an investigation into dumping by Rio Tinto > and BHP Billiton , as well as Brazil’s Vale

The allegations come as iron ore exporters to China face a flat market at best, with Chinese steel production peaking last year at around 800 million tonnes, well under the billion-plus tonnes predicted a few year ago.

The council, the main body representing Australian miners, predicted the proposal was unlikely to proceed to an actual complaint despite China being awash with imported iron ore, since it was being traded “in the open” and in a fiercely competitive market.

Since 2010, most waterborne iron ore is priced on public markets such as the Dalian Commodity Exchange or is set using published indices such as Platts.

Rio Tinto and BHP declined to comment.

The Chinese miners complained that hundreds of domestic producers have been forced to shut.

China’s iron ore imports are forecast to increase by 2.1 percent to 974 million tonnes in 2016 and by a further 0.7 percent to 981 million tonnes in 2017 because of declining domestic production, according to Australia’s Department of Industry.

A fourth Australian miner, Fortescue Metals Group, which was not named in the statement, shipped a record 169.4 million tonnes during the fiscal year 2016, almost all sold into China.

“It doesn’t surprise me,” Fortescue Chief Executive Nev Power told Reuters. “When businesses are under pressure, people will look at all the opportunities to try and change that.”

Last year, Rio Tinto’s then chief executive, Sam Walsh, predicted about 125 million tonnes of Chinese domestic iron ore production had been displaced by imports, about a fourth of total production.

Brazil’s Vale has commissioned a fleet of iron ore freighters that can carry 360,000 tonnes of ore from South America, double the size of typical Capesize vessels, to compete with the shorter sailing times from Australia to China. (Reporting by James Regan; Editing by Christian Schmollinger)

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