Australia  and china  iron ore boom or bust  – The love hate relationship

Its  not very clear when  incidents like this happen. But its sure  appears that these incidents are showing as a pattern. When last year a top Rio Tinto executive Stern Hu was arrested and  subsequently charged in china for alleged illegal activities in china ( this action was immediately pre-ceded by the chinalco – Chinese steel company and Rio tinto joint venture being refused by Australia due to security and monoply concerns)

Chinese iron ore ship in australia

Fast forward to today  and  an another incident  has happened , when the Chinese mining transport ship in australia was eventually fined for allegedly taking a short cut through a popular  marine tourism area in china ( and then getting the ship  grounded  .. and damaging a world class marine life heritage site in Australia) . This particular News was immediately followed  by  china announcing that the  two biggest Iron ore companies joint venture deal would be put into review by china.

In Indian iron ore news update ,

India’s exports of low-grade iron ores will be hit hard by China’s curb on purchases announced yesterday, a senior Indian industry official said on

Friday. In 2009/10, Indian exported 106 million tonnes of iron ore out of a total production of 222 million tonnes, most of which went to China. Shares of India’s largest exporter of iron ore, Sesa Goa fell nearly 5 percent, closing at 468.7 rupees at around 1000 GMT. The company is a unit of the London-listed Vedanta Resources.

“Exports would fall substantially. Of course this will be detrimental,” Glenn Kalvampara, secretary general of the Goa Mineral Ore Exporters’ Association, told Reuters.

On Thursday, China’s iron ore trading association banned its members from importing ores with less than 60 percent iron content, but the ban did not apply to steelmills and their licensed agents.

BEIJING, April 16 - Stockpiles of imported iron ore at China’s major ports stood at 67.31 million tonnes by the end of this week, 670,000 tonnes higher than last week, data from industry consultancy Mysteel showed on Friday.

Ores originating in Australia stood at 20.98 million tonnes, up 530,000 tonnes and making up 31 percent of the total. Brazilian ores reached 17 million tonnes, down 300,000 tonnes and accounting for 25 percent of the total. There were 16.37 million tonnes of Indian ore, down slightly from 16.40 million tonnes last week and accounting for 24 percent of the total. China’s port ore stockpiles have been around 65-75 million tonnes since the second half of 2008, when prices in the spot market collapsed and large quantities of benchmark-priced deliveries were left uncollected. Speaking earlier this month, China Iron and Steel Association Secretary General Shan Shanghua urgedChinese steel mills and licensed traders to use the stockpiles to enforce a two-month trade boycott against the three big global miners — Vale <VALE5.SA> of Brazil and Australia’s Rio Tinto <RIO.AX><RIO.L> andBHP Billiton <BHP.AX><BHP.L>. Indonesia stock market

CISA has accused the three miners of using their monopoly status to impose unfair price increases on their steel mill customers.

Spot market iron ore prices in China have continued to surge this week, with Mysteel’s composite price indexrising 8.6 percent by Friday to end at 181.4. Imported ores rose 9.1 percent and domestic ores 5.9 percent.

Ref Link: china Stock market