Mining News Agency- Mr Keyvan Jafari Tehrani a member of the board and the head of international affairs at Iranian Iron Ore Producers and Exporters Association said that “Iran is currently the seventh largest iron ore supplier to China a three step drop compared to its 2013 heyday.”
The analyst was quoted Donya-e-Eqtesad as saying that “Naturally, Iran has a meager share of the Chinese [iron ore] market. This is while up until 2013, Iran’s ore exports were both supported by high volumes and global prices in China.”
According to Mr Tehrani, Iran’s share of Chinese iron ore imports stood at 2.3 to 2.5% in 2013, but it exported a total of 23.5 million tonnes, over 90% of which went to China.
The next two years were witness to a large number of Iranian private iron mines’ closure and consequently a sharp drop in exports. The country was overpowered by tough competitors such as Australia, Brazil, South Africa, India, Canada and Ukraine. This brought Iran’s share of Chinese ore imports to only 1%, a figure persisting to date.
Mr Tehrani forecasts Iran’s 2017 iron ore shipments to reach 17-17.5 million tons by the yearend, emphasizing that despite the 6-million-ton drop compared to 2013, the same 90% of it will go to China.
Mr Tehrani said that “This is a negative thing; Iran is extremely dependent on the Chinese market, and any change in its dynamics will have an equally powerful effect on Iran iron ore output and exports.”
Mr Tehrani said that what made Iranian miners addicted to China was the fact that the Chinese were the only buyers paying in cash and circumventing banking sanctions against Iran.
The official added that the Chinese paid about 30-40% of the amount in cash and the rest through currency exchanges outside the banking system when the cargo was delivered.
Mr Tehrani added that and things have not changed now. Sanctions have been lifted “only on paper” and are still in full force, preventing headways in other markets such as Europe.
Issues tangled up further, however. For starters, there were signs of hope of restoring banking relations in early 2016, but Donald Trump’s election as the president of the United States last November cut most advances made on the nuclear deal front.