Steel Firms Become Focus after Huge Ore Find in Liaoning

Two steel companies are in the stock market spotlight after reports of the discovery of a large iron ore deposit in Liaoning province.

The two Liaoning companies, Angang Steel and Bengang Steel, had separately "clarified" their involvement in the fabled mine after their shares were suspended from trading earlier this week because of the "unusual" price surge.

The reported 3 billion tons reserve, owned by the little known Shenzhen Yizhongxin Mining Investment, exceeds the combined reserves of Angang and Bengang. Yizhongxin was founded in 2007, with a registered capital of 10 million yuan.

Despite skepticism about the reported size of the ore reserve, analysts and investors are convinced that the steel industry as a whole, and Liaoning mining enterprises, would benefit from the find.

The 3 billion ton of iron ore is estimated to be worth around $246 billion, according to the latest spot market prices from steel information provider Steel Business Briefing.

But the discovery is still great news for the steel industry as its existence can in any way help the price negotiation. As the minister of land and resources had said recently, a $1 reduction in the price can save up to $500 million a year in imports.(xinhua)