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China’s demand is strong but diplomacy is needed: Gaines

Michael SmithChina correspondent
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Fortescue’s boss says diplomatic tensions have not soured relations with its big customers in China where demand for iron ore remains strong, but says more behind-the-scenes diplomacy is needed to mend ties.

“We haven’t seen any change in our relationship with our customers. We are seeing ongoing strength in demand,” chief executive Elizabeth Gaines told The Australian Financial Review Business Summit on Tuesday when asked if iron ore was immune to China’s economic coercion.

Fortescue Metals Group CEO Elizabeth Gaines speaks at The Australian Financial Review Business Summit.  Janie Barrett

“We’ve never been complacent. We actually work very hard to maintain strong relationships, but it isn’t as simple as saying Australian companies should just diversify.”

Fortescue and other Australian iron ore exporters posted bumper profit results last month due to record demand from China for the steel-making commodity.

Beijing has slapped restrictions on other Australian commodities including coal, but has been unable to supply high-quality iron ore from other sources. China produces more than 60 per cent of global steel so would remain a key market, she said.

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Summary | 5 Annotations
demand for iron ore remains strong,
2021/03/09 05:33
behind-the-scenes
2021/03/09 05:34
We haven’t seen any change in our relationship with our customers.
2021/03/09 05:34
but it isn’t as simple as saying Australian companies should just diversify
2021/03/09 05:34
China produces more than 60 per cent of global steel
2021/03/09 05:35