SteelOrbis Shanghai
Shan Shanghua, the secretary-general of CISA, announced recently that the companies with iron ore import qualifications will be watched closely regarding the volume and flow of the imported iron ores as of January 1, 2009. According to the statement of Mr, Shan, the imported iron ore should be mainly used for the company's own production for one year. Agents, importing on behalf of the companies that are not qualified, can only ask for 3-5 percent commission instead of raising the price greatly and thus making profits by virtue of the price difference.
Actually China has already adopted registration and recording system regarding iron ore imports since November 1, 2007, that is to say, the companies which import iron ore should report their iron ore contracts and register the flow of the imported iron ore.
In the last two years, the number of the companies which can have the qualification of importing iron ore has been decreasing. In 2005, over 500 companies had iron ore import qualification, however, the number was reduced greatly to 118 in 2006 and further decreased by 6 in 2007. At present, only over 70 companies and 30 traders have the qualification to import iron ore.
With regard to the undergoing iron ore negotiation, Mr. Shan said that it is still not clear whether to decide the prices of the long-term contract to be signed next year for a yearly, semi-yearly or quarterly period. CISA will have a comprehensive consideration on the reasonable profits of mines and thus determine a reasonable price.