Iron ore storage charges at China's ports are to see a substantial increase from June 1 - a move instigated by China's National Development and Reform Commission (NDRC) which will help to relieve the historically high iron ore inventory levels at the country's ports.
Taking Tianjin Port as an example, for storing periods longer than 90 days, the new iron ore storage charge will be RMB 0.4/mt per day; for storing periods of 60-90 days, the charge will be RMB 0.2/mt per day; for storing periods of 60-31 days, the storage charge will be RMB 0.1/mt per day; and the first 30 days of iron ore storage are free of charge. According to the rates in effect up to June 1, the iron ore storage charge at Tianjin Port is RMB 0.1/mt per day for storing periods of longer than 90 days, with no charge for the first 90 days.
Given the rumors that the long-term iron ore contract price will go up further, mills and traders have increased their iron ore imports from Brazil and Australia so as to stock as many supplies as possible before any further rise. As a result, imports have been far in excess of demand.