China will abandon its existing iron ore import licensing system as of July 1 in a move aimed at opening up the iron ore import market, as indicated by China's Ministry of Commerce (MOC). As of the date in question, companies will be able to apply for iron ore and alumina oxide importing licenses online, with this change expected to promote free trade and simplify approval procedures. In particular, the new system is expected to provide greater ease of access to overseas iron ore resources for medium- and small-scale steel companies which at present have to pay commission charges to intermediaries who possess importing rights for iron ore. Currently, 105 companies in China have licenses to import the raw material in question, including 65 steel producers and 40 traders. According to a market insider, traders with importing rights charge a commission fee of RMB 0.3-0.5/mt to help other companies import iron ore. An official from the MOC said that online application for iron ore import licenses is expected to reduce the raw material costs of Chinese mills.
China imported a record 743 million mt of iron ore in 2012, up eight percent from the previous year.
Currently, the China Iron and Steel Association (CISA) and the China Chamber of Commerce of Metals Minerals and Chemicals Importers and Exporters (CCCMC) are responsible for issuing iron ore import licenses.