Iron ore exports to China plunge 26% in August

The country's iron ore exports to China has slumped by 26.5 per cent in August to 4.59 million tonnes, lowest monthly level since October last year, as compared to July. The decline is continuing after the Centre imposed an export tax in March.

"Indian iron ore exports to China in August hit their lowest monthly level since October 2006. China's total August imports were down by 12.8 per cent from July at 29.29 million tonnes, with shipments declining from most major supplying countries," the Steel Business Briefing (SBB) reported quoting data from China Iron and Steel Association (CISA).

The iron ore export to China has declined by 26.5 per cent in August compared with July when the country shipped 6.2 million tonnes to its neighbour, SBB said, pointed out that volumes have been steadily dropping since the Central Government introduced an export tax in March.

During January-August, India exported a total of 56.19 million tonnes to China, a 5 per cent growth as compared with the same period in 2006. Brazil and Australia have outpaced this growth at 27 per cent and 14 per cent respectively, SBB said.

As Indian monsoon season traditionally impact China's import data during September and October, prices may be set to skyrocket even further above the current 155 dollars a tonne.

"However, Chinese traders comment that such high prices are unacceptable and that buying activity is declining as a result," it reported.

Meanwhile, quoting Yan Bangsong, vice-chairman of China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC), SBB reported that from November the CCCMC has made it mandatory for Chinese iron ore importers to provide with details of all iron ore import contracts and sales. CCCMC has been assigned by China's Ministry of Commerce (MoC) to collect the information, it quoted Yan as saying.

CCCMC and China Iron & Steel Association (CISA) met in Beijing on September 24 to discuss the matter along with the training module that importers would be offered to enable them to use a special computer programme being introduced to collect the data.

SBB said industry observers believe that the move is aimed at curtailing speculative sales of iron ore, and controlling wastage. Importers will be responsible for the veracity of the information they provide, Yan declared. If any firm is found to have misled CCCMC, the MoC will be notified and the importer punished according to the relevant foreign trade law.