China – Restrictions on the Importation of Low Grade Iron Ore

The International Group has recently been advised by Hai Tong & Partners, Beijing of a problem concerning the importation of low grade iron ore into China.

In April 2010 the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC) and the China Iron & Steel Association (CISA) advised their members to stop importing iron ore with an iron content of less than 60%. It has since been difficult to obtain a government permit for the importation of low grade iron ore through these two organisations. As a result some vessels carrying low grade ore to Chinese ports have suffered considerable delays, and difficulties have been encountered with charterers not paying freight, demurrage or dead freight for such cargoes. It is understood that these restrictions apply only to shipments involving steel traders; large steel mills and their agents are still able to obtain the necessary import licences.

To avoid the possibility of delays and disputes, Members contemplating the carriage of low grade iron ore such as that shipped from certain Indian ports, particularly Goa, are advised to check with the charterers, shippers and cargo receivers to confirm that the Chinese buyers possess a government permit to import such a cargo.