China, the world’s largest iron ore buyer, scrapped a licensing system for imports of the steelmaking raw material, according to two industry executives.
The abolition of the permit system will help small and medium-sized trading companies easy access to the raw material, said Wang Chunsheng, head of iron ore trading at Beijing-based steelmaker Shougang Group, who was previously vice secretary-general of the state-run China Iron and Steel Association. Zhu Dingfa, vice president for purchasing at China Railway Materials Trading Co., a unit of the China Railway Group Ltd., also confirmed the scrapping of the licensing system.
Easier import rules may help cut shipment costs and make purchases more transparent and efficient for buyers, Zhu said. The changes won’t have much impact on larger companies such as Shougang as they held licenses under the previous system, according to Shougang’s Wang. The changes were reported earlier today by Reuters.
Two calls to the steel association’s Beijing office after office hours weren’t answered today.
“This is a significant move and it will help level the playing ground,” Zhu said. “We may not see imports jump but we will definitely see less manipulation and less hoarding.”
China imported a record 745 million metric tons of iron ore in 2012. Inventories at China’s ports and mills are at the lowest in 2 1/2 years at 20 days of demand, Dominic O’Kane, an analyst at JPMorgan Chase & Co., said in a report today.
Iron ore for immediate delivery at Tianjin port in China climbed 1 percent to $112 a dry ton today, according to The Steel Index Ltd. The steelmaking ingredient fell to $110.40 a dry ton on May 31, the lowest since October.