SYDNEY / MELBOURNE – The Australian government said on Thursday that changes in Chinese iron ore inspection procedures should streamline customs for Australian shipments, reassuring markets worried about deteriorating relations between Canberra and Beijing.
On Wednesday, China said it would simplify customs inspection procedures for iron ore imports starting June 1, with quality checks no longer mandatory.
But the move sparked some concern in Australia, given that it was closely followed by China’s decision to ban some Australian meat exports and impose tariffs on wheat shipments.
Diplomatic relations have recently been strained by Australia’s call for an independent inquiry into the origins of coronavirus.
Iron ore is Australia’s most valuable export to China, valued at A $ 63 billion ($ 41 billion) each year.
Australian Trade Minister Simon Birmingham said the move could streamline customs for iron ore.
“Easing administrative barriers and such costs will be a positive example of the further opening of the Chinese market that President Xi had previously carried out, as well as reforms that could help the global economic recovery,” he said in a statement sent by email.
The Global Times, owned by the Chinese government, which has attacked Australia for lobbying for an investigation into the corona virus, said the change was not aimed at Australia.
“China has the power to hurt the Australian economy but will not fire the first shot in a trade war,” the newspaper said in an editorial.
Analyst Peter O’Connor at Shaw and Partners said there was no chance China would target Australian iron ore in the near future because China had other minimal sources of supply.
Benchmark iron ore prices reached eight-month highs of $ 98.20 per tonne in Shanghai trade on Thursday.
According to Chinese customs data, 65% of China’s iron ore imports in 2020 came from Australia. China, the world’s main iron ore consumer, brought in 358.4 million tons in the first four months of 2020, driven by strong demand at the plant.
($ 1 = 1.5253 Australian dollars)
(Reporting by Kirsty Needham)
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