China steel group opposes BHP-Rio iron ore venture

SHANGHAI, June 9 (Reuters) - The China Iron and Steel Association, the country's steel industry group, said on Tuesday that it opposes a joint venture deal consolidating iron ore assets of BHP Billiton (BHP.AX)(BLT.L) and Rio Tinto (RIO.AX)(RIO.L) in Australia.

"A joint venture agreement like this has a strong monopolistic tint. We Chinese steel enterprises set ourselves in opposition to the establishment of such deals," the association said in a statement on its website, www.chinaisa.org.cn.

The comments are in line with those of Shan Shanghua, the association's General Secretary, in a report by China's influential Caijing Magazine late last week. [ID:nSHA4640]

The statement also warned domestic iron ore traders not to speculate on imported iron ore prices, reiterating that China should unify the price of imported iron ore.

It said the establishment of iron ore trading centres had violated a national steel industry plan the central government issued early this year and asked the regulators to terminate their business licences.

China's first iron ore trading centre opened last week in Rizhao, a major Chinese port, which is set to establish an iron ore price index for China.

China's steel industry, the world's largest, opposes the formation of an iron ore price index, fearing this would undermine its pricing power with ore producers and lead to more volatile production costs. (Reporting by Alfred Cang and Edmund Klamann)