China to scrap iron ore import licence system

Item from last week – so not new news, just a bit of weekend catch-up:

  • China plans to scrap its decade-old iron ore import licensing system this year

  • From unnamed sources

  • This could cut costs for Chinese steel mills by eliminating licensed middlemen charging commissions for imports

  • Opens up access to iron-ore, especially for smaller mills

  • May reduce the pricing power of iron-ore miners as pricing should become more transparent

Of the major-traded currencies this could be most impactful on the Australian dollar. There could be bearish implications as it reduces the pricing power of iron-ore miners, but of course, any reduction in prices could spur increased demand (of course, there are other factors at work in the Chinese demand for resources).

More: Bloomberg and Reuters

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