Reporter: These days, Chinese iron ore import has received greater attention from the society. For a period of time, some international mining giants have been building their own fleet one after another. They have already made a vast fleet expansion plan. From what we understand, if this vast fleet expansion plan was realized, Chinese iron ore transportation would be substantially monopolized by them. Therefore, we would like to know China Shipowners’ Association’s view on this?

Association Executive: China Shipowners’ Association has noticed that some international mining giants are attempting to monopolize the seaborne transportation of iron ore sold to China by building up their own fleet with newbuilding ordering or second hand acquiring. Those mining giants have been planning a vast fleet expansion for quite some time.

Reporter: Why do these mining giants want to build up their own fleet ambitiously?

Association Executive: Their intention of developing owned fleet in great force is to monopolize or control majority of China-bound iron ore transportation. By utilizing their privileged advantage, based on their existing control over iron ore pricing, they intend to further strengthen their control of transportation, the freight rate for seaborne iron ore transport, extend their monopoly on industries and finally figure for bigger benefits.

Reporter: How will the mining giants’ monopoly over seaborne transportation impact Chinese shipping industry and steel industry?

Association Executive: China, being a big shipping country, imports enormous iron ore every year. Lots of shipping companies rely on iron ore transportation as their living basis. If those mining giants monopolized the China-bound iron ore transportation, it would severely and negatively impact the Chinese shipping community and even the world shipping industry, causing many shipping companies very likely to make loss or further go bankrupt. Meanwhile, it would also have adverse impact on the healthy development of the Chinese steel industry as well as the Chinese economy. The consequence is very serious.

As you know, controlling transportation means controlling freight rate. Those mining giants are not only profiteering but also trying to create monopoly on shipping for further exorbitant profits. What’s more important, controlling transportation also means controlling cargo delivery, which will put Chinese steel mills to a more passive position in the whole iron ore trading. Considering the role of steel industry in the country, mining giants’ formation of monopoly will leave Chinese economic development into an extremely passive position. As the representative for Chinese shipping companies, China Shipowners’ Association hereby expresses our concern and high attention. In fact, such behavior of those mining giants has also upset the international shipping industry and banking industry.

Reporter: Then, what will be the fair arrangement of international trade transportation?

Association Executive: Firstly, at present and for a very long time ahead, the worldwide overcapacity of tonnage is an extremely serious problem. Therefore, those mining giants should not order newbuildings on a large scale to aggravate the worldwide shipping crisis which is already serious. Instead, they should make full use of the existing world fleet and avoid massive waste caused by redundant ship construction. After all, these meaningless wastage and losses are to be taken up by the whole world in the end. Secondly, the interest and appeal of both sides of international trade should be fully considered, and either party should not take advantage of its superior position to damage the other party’s interest. Thirdly, the fair play environment should be created in the shipping market. Such behavior that violates the market principle should be prohibited as abusing the dominant position, manipulating the market and monopolizing the cargo resource. Some mining giant abuses its dominant position, intimidating Chinese steel mills to hand over the right of arranging transportation. Otherwise, this mining giant will find trouble with the steel mills, making the vessels that are chartered by the mills to wait at anchorage with the excuse of no suitable cargo stem. This is not acceptable to China Shipowners’ Association.

Reporter: What is China Shipowners’ Association’s opinion and suggestion on the development of this matter?

Association Executive: China Shipowners’ Association hopes those mining giants will be responsible companies and to give due consideration to other side’s interest while developing their business. Their fleet expansion should be self-disciplined, within limit and stop before going too far. Both cargo owners and shipowners should be able to transport a fair and reasonable part of the cargo, allowing certain competitions in the shipping market. This is beneficial to the long-term stability of economic development of both parties, the safety of trading, improvement of service provided by shipping companies and so on. If those mining giants disregard the interest of other parties and insist on monopolizing or controlling shipping by building their own fleet, it will face strong objection from Chinese shipping community and the world shipping industry as well. At the end of the day, such monopoly will bring about huge losses and unfavorable results to those mining giants.