SteelOrbis Shangahai
It has lately been reported by the international media that during recent weeks China blocked some spot iron ore shipments from Australia's two largest iron ore producers, Rio Tinto and BHP Billiton. As per the industry reports in question, although many iron ore cargos intended for the spot market have been unloaded at Chinese ports, import approval from the Chinese authorities has not been forthcoming.
Speaking on Thursday, March 20, with regard to this issue, China Iron and Steel Association (CISA) vice chairman Luo Bingsheng declared that it was absolutely groundless to say that China was blocking imports of spot iron ore shipments. Firstly, he said, licenses are not necessary for the import of iron ore. Secondly, although the Chinese government requires that import iron ore contracts should be registered and recorded, the registering and recording process is simple and easy on condition that the iron ores are not being imported by mini mills marked for elimination by government policies, and also on condition that documents for the process in question are complete.
Furthermore, Mr. Luo went on to stress that what China's steel industry most desires is the honesty of the international iron ore producers. He stated that it was inexpedient and showed a lack of good faith, if, on the one hand, iron ore producers emphasized that they cannot ensure the supplies stipulated in the long-term iron ore agreements due to force majeure and lower availability of materials, entailing a sharp decrease in contract fulfillment rates, even to below 90 percent; and, on the other hand, if the producers in question publicly declare that they have spare iron ore shipments available for the spot market. Mr. Luo stated that the modus operandi in question was actually a means of redirecting to the spot market iron ores that should have been supplied within the scope of the long-term agreements.