China further restricts iron ore imports

China has announced new restrictions on iron ore imports in order to reduce the number of iron ore importers further from the current figure of 118. According to a joint statement from the China Iron & Steel Association and the China Chamber of Commerce of Metals, Minerals & Chemicals Importers and Exporters, only the companies which imported at least 700,000 tons of iron ore in 2006 will be permitted to import iron ore in 2007, so long as they have a minimum of RMB 20 milllion ($2.56 million) in registered capital. This is the second time that China has imposed restrictions on iron ore imports. Before this, China had reduced the number of iron ore importers from 500 to 118 (70 steel mills and 48 trading companies) in March 2005. At that time, the companies were required to have RMB 10 million in registered capital ($1.28 million), and they also had to be able to declare a minimum of 400,000 tons in iron ore imports for the previous year. It remains to be seen how many importers will survive the implementation of the latest restrictions.