XFN Asia Cited Mr Dong Hui an official with China's General Administration of Quality Supervision Inspection and Quarantine as saying that China which sources over 15% of its iron ore imports from India is looking to expand its list of suppliers as spot prices of ore from the subcontinent continue to rise even as quality diminishes.

Mr Dong said “We have begun looking to opportunities in Liberia and Saudi Arabia to diversify suppliers. He said the degree of purity of Indian iron ore is on the decline.”

He added that the “Fe content of landed Indian iron ore in China before 2003 averaged around 65% but now the grade is getting lower and lower.”

Indian iron ore served about 25% of the import market in China three years ago but the figure has since fallen to around 15% as buyers switch to contract-priced ore from Australia and Brazil.