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China steel body looks to restrict iron ore imports

The China Iron and Steel Association is drawing up measures to reduce the number of traders allowed to import iron ore, an industry source and a report on an online news portal said.

“CISA is currently discussing the measures with the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC) and details will emerge later,” a source at CCCMC said.

According to a report by China Finance Information, an online news portal, the association plans to tear up the import licenses of trading companies that imported less than 1 million tons of iron ore in 2009.

CISA, which was not immediately available to comment, has previously blamed small traders for undermining its position in benchmark price talks with foreign miners last year.

It claims their imports of vast quantities of ore made it difficult for the association to persuade Rio Tinto, BHP Billiton and Vale to give a favorable price to their Chinese customers.

CISA has since vowed to crack down on the “chaotic” iron ore market, and to substantially reduce the number of licensed importers.

An inspection of stockpiles building up at major Chinese ports got underway earlier this month, with the aim of ascertaining which traders were buying merely to speculate on soaring prices.

A trader based in east China's Zhejiang province said the new measures were unlikely to have much of an impact on the market.

“There are very few traders who import less than 1 million tons anyway,” he said, adding that many traders in the industry were already operating without licenses. (Reuters)