China gripes about Indian iron ore quality
Beijing is complaining about the quality of iron ore imported from its number three supplier India, but with China desperate to secure raw materials for its steel mills, the trade is unlikely to slow.
The country's steel output, already more than half the world's, continues to power ahead despite worries about monetary tightening, hitting a record daily high of 1.95 million tonnes in the first 10 days of May.
And China has a history of failing to impose its will on the country's fractured and fractious steel sector, after failing to keep steel mills from signing quarterly rather than annual contracts with the top iron ore miners.
"I don't think there is anything the Chinese can do about it," said Graeme Train, analyst with Macquarie Securities in Shanghai.
"The Chinese are fully dependent on the Indians to get their ore and the Indians are fully dependent on the Chinese to sell their ore, so China will keep buying, unless they want their economy to grind to a halt."
The General Administration for Quality, Supervision, Inspection and Quarantine, China's quality watchdog, said on Thursday that as much as 36 percent of the ore shipments delivered to Jiangsu province on the eastern coast in the first four months of the year did not meet required levels for iron content or had impurities.
It said in a notice posted on its website (www.aqsiq.gov.cn) that the affected cargoes of "ore and ore products" had a monetary value of $2.2 billion, although Chinese customs figures show Jiangsu province received 19.8 million tonnes of iron ore in the first quarter, with a total monetary value of $3.2 billion.
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