Beijing, 24 March 2010

China has launched an investigation into imported iron ore inventories that have built up at some of its major ports, the China Daily reported on Wednesday. Citing a source familiar with the issue, the newspaper said investigators were examining the quality of ores imported during the second half of last year, when spot market prices began to make gains for the first time since the global financial crisis, putting mills under pressure to seek cheaper options.

Port stockpiles have stood near 60-70 million tonnes since the second half of 2008, when spot market prices fell below the annual benchmark price.

China also continues to support the annual benchmark pricing system for iron ore but opposes "any form of monopoly behaviour" that flouts market rules, a government official said on Tuesday.

Jia Yinsong, head of the raw material department at the Ministry of Industry and Information Technology, said at a briefing for domestic reporters that China supported a contract pricing mechanism that served the long-term interests of both buyers and sellers and prevented "excessive" speculation, according to state news agency Xinhua.

He said both sides should respect "the fundamental rules of international iron ore trading" and promote the healthy and sustainable development of the iron and steel sector.

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