China has refused to grant new licenses to iron ore importers if they are not part of the domestic trade. The move by the world's largest consumer of iron ore aims to tackle the pricing of global miners.
China, which buys about 1 billion tonnes, is trying, under the new rules, to force traders and steel mills that want new import licenses to sell at least 551,155 tonnes of iron ore on a platform built in China. Only Chinese firms are eligible to obtain an import license. China's iron ore trading platform competes with the globalORE platform in Singapore. And new rules in a country where tens of thousands of iron ore traders can give CBMX more trades and increased liquidity. Global miners BHP, Vale and Rio Tinto and Chinese metallurgists, including Baoshan Iron and Stee, are members of both platforms.
China has long suspected that some tough miners and traders are manipulating iron ore prices. Chinese officials want iron ore trading platforms to be more transparent and open, although mining companies may fear Beijing will gain significant control over pricing. In the event that large business exchanges flow, miners will be under Chinese pressure, and iron ore prices will reach 2010 levels.
