Only dozens of Chinese companies have submitted application one month after China replaced its decade old iron ore import licensing system with a new one from this July which is far from what it is originally conceived.

Most businesses are familiar with the previous license application and it takes a while to come to the new regulation especially when China is slowing down and domestic steel market reports a subdued outlook.

In 2005 CISA and the China Chamber of Commerce of Metals Minerals and Chemicals Importers and Exporters, a unit that helps regulate iron ore trade on behalf of the Ministry of Commerce, worked together to issue licenses to importers, mandating applicant’ annual crude steel output should be above 2 million tonnes and iron ore deliveries in the last year should be no less than 0.3 million tonnes.

The rule reduced applicants to 118 businesses and cut it further with higher standards. The high concentration thus caused in destinations failed to break the monopolized market as expected.

Now with the new system, business no longer needs approval by government backed industry bodies such as CISA and is able to apply for license even if they had never done iron ore imports before.

One precious iron ore trader is quoted as saying in the report that he left the market because profit in iron ore trading is too little in recent two years.

One executive at a large steel company in China, who had iron ore import licenses, confirmed in the report that their import destinations are definite but said import plan is based on steelmaking activity and they have no plan to buy more iron ore so far.