China should limit iron ore importers to five - Adviser

China, the world¡¯s largest consumer of iron ore, should slash the number of licensed importers to as few as five to boost price bargaining power and encourage steelmakers to merge.

Mr Li Xinchuang executive VP of the China Metallurgical Industrial Planning and Research Institute and a government adviser said licenses should be limited to between 5 and 10 down from 112. He said that the suggestion was submitted to the Ministry of Industry and Information Technology.

Mr Li said ¡°Given the fact that China¡¯s steel industry is still fragmented, what we can do is to cut the import licenses greatly. Cutting the licenses would also narrow losses in iron ore trading by stabilizing prices. The nation incurred at least CNY 140 billion of losses last year.

Mr Li and major Chinese steel mills last week attended a meeting held by the industry ministry, he said. China should consider banning spot iron ore imports, the Beijing Morning Post reported today, citing comments made by Mr Luo Bingsheng vice chairman of the steel association at the meeting.

Mr Li wouldn¡¯t comment on Mr Luo¡¯s remarks. Calls to the steel association weren¡¯t answered.

Mr Li and his research institute helped draft China¡¯s first steel industry policy in 2005 and also contributed to a government stimulus plan last year. Mr Shan Shanghua the secretary general of the China Iron & Steel Association is also the president of the institute.

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