By Melanie Burton
(Reuters) – At least two iron ore cargoes from the world’s No.4 supplier Fortescue Metals Group are facing unusual customs delays at north China’s Caofeidian port due to inspections for solid waste, sources with knowledge of the matter said.
The cargoes were in two shipments totalling roughly 400,000 metric tons, the sources said, worth around $55 million, though only the portions earmarked for portside sale by Fortescue after arrival face delay, while volumes already sold were little affected.
One of the partial cargoes has been delayed at Caofeidian, among China’s busiest for handling the key steelmaking ingredient, since December, while another arrived this month.
Normally, it takes one to three days for iron ore shipments to clear Chinese customs, the sources said. Several industry insiders said they had not previously heard of such inspections for major iron ore importers.
The delays come as Fortescue and Chinese state iron ore buyer China Mineral Resources Group (CMRG) – set up in July 2022 to centralise purchasing and gain more bargaining power with global mining firms – negotiate a 2024 procurement deal.
According to several traders and steel mill sources, CMRG and Fortescue have had difficulty reaching terms on the agreement, although it could not be determined whether there was any connection with the shipping delays.
It was not clear whether FMG’s cargoes faced similar obstacles at other Chinese ports.
All of the sources requested anonymity because of the sensitivity of the matter.
Caofeidian port authority and Caofeidian customs did not immediately respond to requests for comment. CMRG does not have public contact information and could not be reached for comment.
Fortescue did not directly address the delays in response to a query from Reuters. “We continue to see strong demand for our products with shipments continuing to flow to our customers,” a spokesperson said.
While the inspections are unusual, the volumes held up represent a relatively small portion of Fortescue’s China portside sales – which totalled 3.6 million tons in the September quarter, 7.8% of its total global shipments.
Australia’s big three iron ore miners Rio, BHP and Fortescue have kept tight-lipped on their negotiations with CMRG since its inception.
They escaped an unofficial Chinese ban on a wide swathe of commodities from the country including coal, wine and barley that started in 2020 and only began easing in 2023 as diplomatic ties improved.
China buys more than two-thirds of the world’s seaborne iron ore. Its iron ore imports hit an all-time high of 1.18 billion tons in 2023, a 6.6% annual rise, customs data showed.
(Reporting by Melanie Burton in Melbourne and the Beijing newsroom; Additional reporting by Muyu Xu and Florence Tan in Singapore; Editing by Tony Munroe and Jan Harvey)
Comments