Fortescue signs eight agreements with Chinese steel mills

Fortescue has secured eight memoranda of understanding (MOUs) with major Chinese steel mills during the inaugural China International Import Expo (CIIE).

The line up includes the largest steel group in China, Baowu Steel Group, the recipient of Fortescue’s first ore cargo 10 years ago, and its Echeng subsidiary.

Fortescue also reached an agreement with China’s second largest steel group Hebei Iron and Steel Group.

The miner would further sign MOUs with Rizhao Iron and Steel from Shandong province; Minmetals Yingkou Medium Plate Co and Lingyuan Iron and Steel from Liaoning province; Baotou Steel Co from Inner Mongolia Autonomous Region; and Anyang Iron and Steel from Henan province over the course of two days.

These make up both public and private steel mills across various Chinese provinces and municipalities.

Fortescue chief executive Elizabeth Gaines said, “As the lowest cost supplier of seaborne iron ore into China, Fortescue has enjoyed strong relationships with customers since our first shipment of iron ore a decade ago.

“The MOUs reaffirm our commitment to our customers and demonstrate our significant market presence in China.”

Gaines, at a presentation at the International Mining and Resources Conference (IMARC) in Melbourne last week, expressed her optimism that the United States-China trade dispute would not hit China’s demand for iron ore.

China is Fortescue’s primary market, and its demand for high-grade iron ore hurt the company’s performance in August.

Gaines credited China’s foreign policy and economic strategy One Belt, One Road initiative, which has provided an economic link between China and, among other continents, Oceania.

“As the One Belt, One Road initiative continues to grow, the openness and mutual understanding established by our bilateral trade relationships will be critical to its success,” she said.

“Australia’s significant strategic partnership with China is built on the importance of trade and is a fundamental pillar in our relationships across the Asian region.

“We are delighted to participate in this important exhibition and support the Australian national pavilion, which demonstrates the breadth and depth of Australia’s strategic and economic relationship with China.”