According to information from several large iron ore traders in China such as China Minmetals Corporation, Sinosteel Corporation and China National Building Materials and Equipment Import and Export Corporation, a massive reduction has recently been seen in China's import volume of low grade iron ore.
According to an insider from China Minmetals Corporation, new import contracts for low grade iron ore have fallen since the call made by the China Iron and Steel Association (CISA) two weeks ago for a halt to imports of iron ore with 60 or lower iron content.
Meanwhile, one CISA official commented that the call made by the CISA was aimed at regulating the spot market, especially as regards Indian iron ore. "Indian iron ore transactions are in disorder, with prices increasing irrationally, which directly makes the iron ore negotiations more difficult," he said
On April 22, the CIF price of Indian iron ore fines with 63.5 percent iron content reached $190/mt, exceeding an increase of 40 percent so far for the current year.
Chinese traders have stated that the massive price increases for Indian iron ore have deterred many of them from importing, given that the price increase is so rapid.
CISA secretary Shan Shanghua said that the call made by the CISA is only aimed at regulating the industry, but does not have legal effect.
On the other hand, Li Xinchuang, head of the Chinese Metallurgy Research Institute opposes the CISA move. Mr. Li said that, following the call made by the CISA, prices for high grade iron ore from Australia and Brazil increased rapidly, making the iron ore negotiations more difficult.