It is reported that the news referring to banning iron ore traders from importing low grade iron ore at below 60% Fe imposed by China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters are generating sensational reactions across regions. If CCCMC will virtually put into practice this unexpected plan for the market, Indian iron ore producers in particular may be driven out of the market with a high likelihood.
It is not clear at this moment, however, as to which organization in China will be in charge of putting the banning order into force, and how. Some analysts see that this could have been a sort of tactics taken by Chinese steel mills with a view to placing pressure on iron ore suppliers.
Indian Economic Times in its April 11th article has said "China banning iron ore traders from importing low grade iron ore at below 60% Fe may give serious impacts on the export of Indian iron ore."
In 2009 China imported a total of 628 million tons of iron ore from all over the world. Imports from India totaled 107.5 million tonnes and accounted for 17.1% in the total imports. During the fiscal year ended March 31 this year, India exported a total of 110 million tonnes of iron ore to overseas markets, of which the major destination was China. The major proportion of Indian iron ore exports to China is low-grade ore and accounts for almost 80% of total iron ore exports to China. Most serious impacts will be on exports from Goa the major iron ore export port on the west coast of India. 70% of exports from this port are destined for China.
Several news media have, referring to well informed sources, reported that China Iron and Steel Association has already banned its member companies from importing low grade iron ore of below 60% Fe, and that this action of China makes an integral part of its policy to bring the iron ore import market in order.
CCCMC has reportedly instructed trading firms to suspend import of low grade iron ore at below 60% Fe, with steel mills and their importing agents excluded from its application.
(Sourced from The TEX Report Ltd)
