China is the world’s largest iron ore importers and consumer. Around 60% of the iron ore traded globally is imported by the Chinese market. It has a consumption of around one billion tonnes annually.
China Import Certificate System
Imports of iron ore in China was a lengthy process for the companies located there. The steel makers and trading companies had to first take two kinds of permits before importing the material into the country. First they had to qualify for an import certificate which was issued by the China Iron & Steel Association and the trading houses got it from the China Chamber of Metals Minerals & Chemicals Importers & Exporters. Then, each cargo imported in the country will have to carry along the issued certificate with them.
In line with Premier Li Keqiang’s policy for reducing governmental interference in the market, China was setting up a plan to abandon the import certificate system from the country. On July 1, 2013, it finally put an end to its iron ore import certification system. This abolishment will invite more traders and buyers into the market. Now onwards, only one import license will be required for shipping the cargoes into the country. Government has also commenced the online application procedure of licensing for iron ore.
According to the sources the abolishment of import certificate system is welcomed happily by most of the traders. They say that it is a signal of introduction of more openness and transparency in the market as more companies will now be able to trade freely and get involved in importing of material in the Chinese market. “Allowing more players to get involved in importing iron ore is a good thing for the market, as opposed to putting this in the hands of only a few selected traders or mills,” a Shanghai-based trader said.