16th Dec. - The Chinese government yesterday reportedly made a drastic decision to impose a ban on imports of iron ore resources from Australia estimated at $ 14 billion dollars. The Chinese government has held meetings with 10 leading Chinese companies that are the country's largest iron ore importers and has taken a resolution to continue to allow import activities to be carried out but not from Australia.
According to a press report published yesterday, if previously Australia was the largest exporter of iron ore to China, they are now moving to several other alternative countries such as Mongolia, Indonesia and Russia.
This action was taken as a measure to control the price of iron ore soaring above $ 150.00 dollars per ton. After the ban was announced by China, the price of iron ore began to show a slight decline.
The Chinese government is targeting a source of essential raw materials at a price not to exceed $ 97.80 dollars per ton and the measures taken have begun to bear fruit when iron ore prices began to decline since yesterday.
The Prime Minister of Australia, in a recent response, was furious with China's actions and accused China of violating international trade agreements. He is still in the process of seeking a more in-depth explanation from the Chinese government on this matter.
If the previous strengthening of the Australian Dollar was contributed by the high demand for the AUD for the purchase of coal from Australia by China, this latest ban will certainly affect the demand for the AUD as well as potentially down slightly.
The AUD is currently trading at around 0.75500, a price level that is actually worrying for economic analysts as it will affect the Australian economy as a whole.
CHINA IMPLY IMPORT BAN OF IRON ORE FROM AUSTRALIA
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