China, in a bid to gain a foothold in the global pricing of iron ore, will launch by October its own iron ore price index, with updates released weekly.

Called the China Iron Ore Prices Index, it will use iron ore prices of April 1994 as base for computation. It will cover two indices, one for domestically produced iron ore and another for import price.

China decided to create 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 will be compiled by the China Iron and Steel Association (CISA), the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters, and the Metallurgical Mines' Association of China.

CISA said 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.

Chinese analysts and experts welcomed the creation of the China Iron Ore Prices Index, noting the mechanism will more precisely reflect and forecast price movements and changes, including giving better information systems for steel businesses and trading firms. It will also help Chinese importers to verify standard prices of iron ore bought from India and Australia.

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.

China's demand for iron ore has been reportedly increasing over the past months. CISA said last year's total global steel output came from China at 44.3%. On the other hand, iron ore imports last year were recorded at 618 million metric tons, 62.5% of the total import.