China to publish iron and steel Five Year Plan

China to publish iron and steel Five Year Plan at yearend, official. China is expected to publish the 12th Five Year Plan (2011-2015) for the iron and steel industry at the end of 2010. Industrial restructuring, energy saving, and emissions reduction will be the central elements of the plan, an official with the China Iron and Steel Industry Association (CISA) said. Luo Binsheng, vice chairman of the CISA, said that the association, which has shouldered the drafting work of the plan, has been developing a plan to consolidate the iron and steel industry into a higher level of integration. He said compulsory quotas for energy saving and carbon dioxide emissions reduction would be imposed on the iron and steel industry during the five-year term, while at the same time outdated capacity would be eliminated by encouraging technological innovation and the upgrading of equipment. He said the principles of rule of law and market-oriented approaches will be respected in the industrial restructuring and integration process. However, the CISA official revealed there would be no mention of a new iron ore pricing mechanism in the plan. The CISA, the coordinating body for Chinese steel mills in iron ore price negations with foreign mining companies, in early September 2010 suggested that iron ore prices should be linked to steel prices instead of iron ore indexes, saying that the quarterly pricing mechanism probably is appropriate when the market is unstable. The association argued that the current quarterly pricing system imposed by mining companies on the steel mills has brought about a lot of uncertainty and unpredictability to the steel and related downstream industries. Early this year, the big three global iron ore miners (Companhia Vale do Rio Doce, Broken Hill Proprietary Billiton, and the Rio Tinto Group) launched the quarterly pricing mechanism to replace the previous yearly pricing system.