China stops Australia spot iron ore at ports

At least 300,000 tonnes of Australian spot iron ore are stranded at Chinese ports after Beijing delayed issuing permits in the midst of bitter annual contract talks, traders and shipping officials said on Tuesday.

The traders said it was an attempt by the Chinese government and the industry to pressure Australian miners Rio Tinto and BHP Billiton, which are trying to win increases greater than the 65-71 percent hike agreed between Chinese steel mills and Brazilian miners.

Traders reported at least three cape-sized cargoes worth of ore had been unloaded but were not allowed to leave Tianjin's port of Xingang in the north of the country.

The cargoes were purchased at around $190 to $198 per tonne, including cost and freight --- well above term prices of about $110 to $120 a tonne.

"After the Spring Festival in February, all the vessels that ...have spot prices have not been able to get license," said an iron ore trader in Beijing.

"The cargoes can be discharged but they cannot move out of the ports. In Xingang alone, there should be three cape-size cargoes."

The trader said spot cargoes from India, Russia and Iraq faced no difficulties.

More Australian shipments on the way to China or already in Chinese waters face similar problems, they added. Some ships were also waiting to discharge the cargoes as the ports were running out of space for iron ore.

A cape-sized vessels can carry around 100,000 tonnes of dry cargo, such as iron ore or coal.

No officials from the Commerce Ministry or the China Iron and Steel Association (CISA) were immediately available for comment.

Spot cargoes from Australia that do not originate from the two miners have successfully cleared customs, one trader said.

A shipping official added: "Some ships are waiting as they cannot unload the cargoes. There's only limited capacity at ports to store the cargoes."