Thu 21 Dec, 2017 US$1=CNY Full Converter LATEST:  

China’s diversification strategy of iron ore buying meet with resistance

service@ironoreteam.comFri Feb 10, 2012 05:51am GMT

China's diversification strategy of iron ore buying away from top three miners met with a good deal of resistance as some countries like India and Vietnam raised iron ore export duty, leaving more difficulties for Chinese steel mills to negotiate with top three mining giants.

Vietnam raised the export duty on iron ore and iron ore concentrate to 40 percent from Feb 7 of 2012 from 30 percent, according to Finance Ministry in this country.

The new rate aims to curb crude ore export at lower prices, Vietnam’s iron and steel association said, adding that more iron ore would be used domestic market due the expanding steel production capacity in Vietnam.

Moreover, India, a main iron ore supplier for China, announced to raise iron ore export duty from 20% to 30% at the end of 2011, hitting China’s iron and steel industry in 2012.

Customs data shows China failed to divert its iron ore supplying sources because 64% of iron ore imports in 2011 are from Australia and Brazil, unchanged from a year before.

However, export duty rise set little influence since Vietnam remains a negligible fraction of China’s iron ore imports in 2011, some market players said. They believe China needs to accelerate investments on overseas mines and increase domestic iron ore supply to ease dependence on Australia and Brazil.