China on Tuesday froze some iron ore shipments from Australia’s two largest mining groups, Rio Tinto and BHP Billiton, potentially transforming annual price negotiations into a diplomatic, as well as a commercial, dispute.
The move, which hit spot cargos, came as the miners continue to seek large price increases for long-term contracts to Chinese customers.
China is the world’s largest importer of iron ore. Its steelmakers recently accepted a 65-71 per cent hike for supplies from Brazil’s Vale. But BHP and Rio are seeking a larger hike for their annual contracts to reflect China’s lower shipping costs from Australia. BHP Billion is in the middle of an attempt to buy Rio – strongly opposed by Beijing – to create the world’s biggest iron ore group.
Mining industry executives confirmed that the Chinese authorities had delayed issuing import approvals for several spot market cargos in recent weeks. The Australian government is understood to have raised the issue with Beijing. However, the Chinese government has told the Australians there is no official boycott of its iron ore.
The Anglo-Australian mining groups, the two biggest Chinese iron ore suppliers after Vale, want to sell more on the spot market, where prices can double those of contract prices.
About 300,000 tonnes of Australian ore has been unloaded in different Chinese ports but the paperwork to allow it to be moved has not been issued, said one industry executive.
No comments:
Post a Comment