INDIAN WORRIES
The worries about Indian iron ore quality are not new.
Basant Poddar, vice-president of the Federation of Indian Mineral Industries, said quality issues had come to light in the past for supplies from India's western coast for mid-stream loading.
"Such instances happened in the past for a small quantity but not of this magnitude," he said.
"There will be lot of legal issues to be resolved in the near future including issues related to Line of Credits (LCs)," told Reuters.
Last April, the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC) sought to improve the quality of ore coming into China by banning grades of 60 percent or less. The move was part of a wider plan to impose discipline on the chaotic iron ore market and better regulate hundreds of independent traders.
But with China desperate for supplies, few paid any heed to the directive, and it was not backed up by any ruling from the central government.
China has traditionally struggled to regulate in steel and iron ore markets because of the sheer weight of demand -- and that is expected to remain the case even after the AQSIQ warning.
"This isn't the first time that AQSIQ have complained -- I've seen notices from them about this subject before," said an iron ore trader based in Shanghai.
"Whenever demand is on the up, this problem arises because people stop considering quality and look for quantity," he said.
Chinese steel industry officials said the issue of substandard iron ore from India was long-standing, and in most cases they find a way around it.
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