Number of iron ore importers unchanged due to three reasons

According to a message issued jointly by the China Iron & Steel Association (CISA) and China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters (CCCMC), China's number of qualified iron ore importers for 2007, to be officially announced in March, is only to be reduced to 116 from 118 in 2006. The news comes as a big surprise to many people involved in the Chinese steel industry. The number of qualified iron ore importers was expected to be reduced significantly because of the state's aim to strictly regulate the disordered situation of iron ore imports. However, only four traders will be deleted from the official list of importers, while two local steelmakers will be added. Therefore, the government's plans to decrease the number of qualified iron ore importers seems destined to fail. Drawing conclusions from conversations with important people in China's steel industry, the reasons can be summarized as follows: Most of the current iron ore importers are qualified On December 28, 2006, the CISA and CCCMC jointly issued a document entitled “The iron ore importers' qualification criteria in 2007” with a view to regulating China's iron ore import market. The criteria in question may be divided under the headings of basic standards, operating competence and environmental protection. Before and even up to the issuing of the criteria, some existing iron ore importers were not completely qualified. However, they subsequently made great efforts to improve themselves and finally passed the examination. Thus, deleting some importers from the list has become very difficult. Overseas pressures Due to China's steel exports, many countries have accused China of encouraging exports and restricting imports. The iron ore import system is just one of the examples. Especially under the current pressures from the EU and US, China for the moment does not want to take drastic measures to delete significant numbers of iron ore importers from the official list. Internal conflicts of interest and compromise Any qualified iron ore importer, whether a steelmaker or a trader, must first of all be a member of the CISA or CCCMC respectively. This means that the two associations are authorized by the state to maintain order in the iron ore import market. However, it is absolutely necessary to decrease the number of qualified importers in order to strictly control iron ore imports. Thus, a problem is presented: to cut more steelmakers from the CISA or to cut more traders from CCCMC. It is a very difficult situation for both big associations. Finally, the view of the CISA gained the upper hand. After all, the final goal of importing iron ore is to produce steel. Finally, the CCCMC agreed to reduce the number of traders who import iron ore, but the deleted number is not very significant.