Steel yourself

6 December 2007 By John Foley Follow @johnsfoley

China’s big steelmakers are vexed at dependency on a monopolistic iron ore producer. But others like Arcelor Mittal, Tata, Evraz and CSN have their own iron ore and are relishing the prospect of less fortunate brethren being disadvantaged.

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Steel producers have expressed concern over BHP Billiton's proposal to take over rival miner Rio Tinto. Were such a combination to proceed, it would create a company with around 70% of the market for seaborne iron ore a key ingredient for steel production.

An executive at Baosteel, China's largest steelmaker, told Australian radio station ABC last week that the country's new government should act to stop the merger. Fang Xiaodong warned that this kind of behaviour will damage free competition.

The International Iron and Steel Institute, which represents around 180 steel producers, has also called on competition regulators to investigate the tieup, which it argues would create a virtual monopoly and be against the public interest.

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