Chartering brokers in China believe the big three mining giants have nothing to fear from threats by the domestic steel industry that they will radically reduce imports.

China's Iron & Steel Association (CISA) is urging steel mills to boycott trading with Vale, Rio Tinto and BHP Billiton in the next two months, according to domestic media reports. It also aims to tear up import licences of small to medium-size steel mills that imported less than one million tonnes of iron ore in 2009.

The CISA has also vowed to take the axe to existing contracts that it deems to be based on "unreasonable prices and low quality".

However, brokers point to similar threats by the organisation last year that had little effect on the global trade in iron ore.

CISA secretary-general Shan Shanghua says the "chaotic" iron-ore market, where individual steel mills set up independent trade contracts, increases the price for Chinese buyers.

However, one Shanghai-based capesize broker told TradeWinds: "The mills will continue to go behind CISA's back. The association said the same thing last year but it did not make any difference, as it has no power. The mills will continue as they have done because while the Chinese might say, 'We should do A', if they can make money they will always do B." Another broker notes that the current demand in China is simply too great for it seriously to consider turning its back on the three mining giants, which together control around two-thirds of the trade.

"If you take away the mines in Australia and Brazil that are controlled by the big trio, where else can China go for the iron ore that is needed to power its booming economy?" he said.

"It will take some time for India to become a serious exporter and the established mining companies know this."