China, the world's biggest consumer of iron ore, Monday launched its own iron ore price index in a bid to gain a foothold in the global pricing of the raw commodity.

In the first week of October, China's iron ore import price index stood at 652.41, down 0.13 points from the previous week. The average cost, insurance and freight price of imported iron ore was $176.22 per metric ton in the first week of October, down three cents from a week ago.

The China Iron Ore Prices Index uses iron ore prices of April 1994 as base for computation. It covered two indices, one for domestically produced iron ore and another for import price. It is released weekly.

China created its own iron ore index following the corporate strategies and policy restructuring of global mining giants Rio Tinto, Vale and BHP Billiton to adjust iron ore prices quarterly or monthly from the previous long-term contract pricing.

The China Iron Ore Prices Index is compiled by the China Iron and Steel Association, the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters, and the Metallurgical Mines' Association of China.

Presently, global trading of iron ore is based on three major indices - the Steel Index, the Metal Bulletin Iron Ore Index and the Platts Iron Ore Index.

The import price index will be based on data gathered from eight ports, while domestic iron ore price index comes from the prices of iron ore concentrates in 14 provinces, autonomous regions and municipalities, including 32 mining areas.

China's demand for iron ore continues to escalate amid the slump in prices of the commodity. Its steel output accounted for 44.3 percent of the world's total in 2010. On the other hand, iron ore imports last year were recorded at 618 million metric tons, 62.5 percent of the total import.