China cracks down on iron ore loans

China is poised to impose greater limitations on iron ore import loans as some steel mills have misused the loans regardless of overcapacity, Financial Times reported. The China Banking Regulatory Commission warned banks to tighten controls over letters of credit for iron ore imports in a document that caused iron ore futures in China to drop 5% on Monday. Rumours of the stricter measures, which are expected after the May 1 holiday, have been circulating in China for at least two months, after a hasty stock sale caused ore prices to tumble in late February.