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China appears undecided on its iron ore position

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Intention of China, to dominate the iron ore market did not garner everyone’s support, or did it?

Apart from blocking Australia, the republic has not slowed down in its aggressive iron ore buying. In fact, industry experts earlier predicted a trading surge between Indonesia and China, backed by a recently signed three-year coal contract worth $1.5 billion. This is expected to enhance bilateral trade by between 5 and 10 million tonnes annually by 2023. Ironically, China’s regulators are keeping a close tab on spot iron ore trading.

A positively suspicious decree

China’s state planner, the National Development and Reform Commission (NDRC), said it is working with the market regulator to look into the iron ore spot market, and have pledged to crack down on hoarding and speculation. The NDRC said new rules for managing price indices for commodities and services would be effective from 1 August 2021.

It will also standardise price index compilation and transparency of information. The state planner added the NDRC and State Administration for Market Regulation surveyed iron ore transactions and price changes this year during a visit to the Beijing Iron Ore Trading Center Corporation (COREX). The regulators asserted they would also “strictly punish and disclose” irregularities such as hyping prices and hoarding, and maintain good market order.

Iron ore is a formidable weapon for China to gradually rely on the market based on purchase alone. It is hardly convincing a group keeping a close watch on the country’s hoarding; given China’s current iron ore suppliers are amongst the top 10 in the world ranking. Moreover, shortly after United States’ exit from Afghanistan, China stepped in, working actively in tandem with the latter’s government. Afghanistan happens to be rich in iron ore, among other minerals. In fact, it brings China a big step closer to iron ore (dry bulk) domination. Hence, this claim is overpoweringly dubious.

 

Marine Online News Team
Please email us at marketing@marineonline.com to contact the author for this article.

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