After Rio Tinto Group last Friday scrapped a proposed 19.5 billion U.S. dollars of investment by Aluminum Corp. of China (Chinalco), the nation's largest producer of the material.  It has planned to form a joint venture with BHP Billiton to sell the two companies' iron ores.  However, this new venture has been opposed by Steelmakers from China, Europe and Japan.  Their concern is that the joint venture formed by the two giant iron core producers would limit competition.

The China Iron and Steel Association (CISA) Tuesday issued a formal declaration on its website to formally oppose the effort. The declaration says that the joint venture has strong monopolistic tendency and Chinese steel companies resolutely oppose the agreement.

The declaration says that protectionism is gaining ground in international trade and the iron ore trade is gradually advancing in the direction of monopoly.  China is Australian's largest iron ore importer. The joint venture directly affects the interests of Chinese steel companies.  In addition, China's iron import accounts for over 50% of the world's total iron ore trade.  Therefore China's iron ore market price is representative of the world market prices, especially Asian market.

The declaration also says that domestic market does not allow speculative iron ore trade. Iron ore import should follow rules set up in the State Council's Iron and Steel Industry Revitalization and Restructuring Plan.  Imported iron ore prices should be standardized.  Regulators should revoke the licenses of those iron ore importers engaged in speculation.