China’s iron ore consumption growth rate declining
By: Dorothy Kosich
Posted: '14-DEC-06 08:00' GMT © Mineweb 1997-2006
RENO, NV (Mineweb.com) --The world’s largest producer and consumer of steel, China, may be buying less iron ore from foreign suppliers including due to increased domestic production.
Meanwhile, critical iron ore price negotiations have commenced as analysts predict a moderate price increase in 2007, despite China’s strong objection to last year’s 19% price increase.
The official Chinese government news agency Xinhua reported that customs figure show the nation’s iron ore imports dropped 1.3% year-on-year to 21.97 million tons in October, a 22% decrease from September 2006 imports. While total imports from January to October 2006 rose 21.7% to 269 million tons over the previous year, the rate of increase was the slowest in recent years.
Domestic production rose substantially in the first nine months of 2006 with large mine production increasing 37.7% over the same period of the previous year for a total of 406 million tons. This, in turn, decreased China’s dependence on overseas suppliers. Industry consultants Mysteel predicted that domestically mined iron ore will continue to command a larger share of the Chinese market.
India exported 46.75 million tons of iron ore to China during the first nine months of this year, capturing 26.56% of the total Chinese market. However, the world’s largest iron ore miners, including Rio Tinto, BHP Billiton and CVRD, are considered likely to demand a price increase based on tight supplies and unquenchable demand.
Mysteel Deputy Manager Jia Liangqun predicted that the iron ore price will increase 3% to 5% next year as China replenishes its iron ore stocks.
