Analysts have shot down Beijing’s threat that China will replace its massive Australian iron ore imports with Brazilian ore, as China opens up another front in the fledgling Australia-China trade war.
State-controlled media The Global Times warned China could abandon Australian iron ore as it prepares to slap restrictions on Australian beef and barley after Beijing accused Australia of flouting world trade rules.
The accusation from Australia’s largest trading partner follows Prime Minister Scott Morrison’s calls for an international inquiry into the handling of COVID-19.
But one major obstacle undermines China’s threat to replace Australian iron ore with Brazilian: there simply isn’t enough of the core commodity used to make steel to meet China’s demand.
“The market is very tight, everyone is running as hard as they can … you couldn’t find a spare tonne elsewhere in the market,” UBS analyst Glyn Lawcock said…Full Story