Unusual customs delays are holding up Fortescue Metals’ iron ore-cargoes
WE CONTINUE TO SEE STRONG DEMAND FOR OUR PRODUCTS WITH SHIPMENTS CONTINUING TO FLOW TO OUR CUSTOMERS
At least two iron-ore cargoes from the world’s No 4 supplier, Fortescue Metals, are facing unusual customs delays at north China’s Caofeidian port due to inspections for solid waste, say informed sources.
The cargoes were in two shipments of altogether 400,000 tonnes, the sources said. They are worth about $55m, though only the portions earmarked for portside sale by Fortescue after arrival face delay, while volumes already sold are 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 in January.
Normally, it takes one to three days for iron-ore shipments to clear Chinese customs, the sources said.
Several industry insiders said they have 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 in reaching terms on the agreement, though it could not be determined whether there is any connection with the shipping delays.
It is not clear whether Fortescue’s cargoes face similar obstacles at other Chinese ports.
All the sources requested anonymity due to 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. “We continue to see strong demand for our products with shipments continuing to flow to our customers,” said a spokesperson.
While the inspections are unusual, the volumes held up represent a small portion of Fortescue’s China portside sales, which totalled 3.6-million tonnes 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 twothirds of the world’s seaborne iron ore. Its iron-ore imports hit a record high of 1.18-billion tonnes in 2023, a 6.6% annual rise, customs data shows.