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Imported iron ore prices to remain stable

(Xinhua)
Updated: 2006-10-31 11:35

China can expect to see imported iron ore prices leveling off next year as steel production remains stable and iron ore output grows steadily, according to a senior industry official.

Since January, the growth rate of iron ore imports had slowed, said Luo Bingsheng, vice chairman of the China Iron and Steel Association (CISA).

Imports stood at 247 million tons for the first nine months, up 24.2 percent over the same period last year, seven percentage points lower than the pace at the same time last year.

Driven by surging fixed assets investment, China has become the world's largest importer, with imports growing at an annual rate of 30 percent from 2001 to 2005.

The growing demand has resulted in a continuous rise in international market prices, which surged 71.5 percent in 2005 and 19 percent in 2006.

Meanwhile, China's iron ore output has increased rapidly. National Bureau of Statistics figures show China produced 406 million tons of crude iron ore in the first nine months, up 37.7 percent year on year.

Luo attributed the growth to greater investment in mines by large and medium sized state-owned enterprises, which grew 114 percent year on year in 2005, and 56 percent in the first eight months this year.

He predicted that China's output would continue climbing next year to meet domestic demand.

The CISA and the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and exporters are trying to upgrade standards for enterprises engaging in imports of minerals.

Regulation of the sector's trade and market order would create a favorable environment for future iron ore negotiations, said Luo.

He forecast the world iron ore supply would remain the same next year as this year, and the domestic supply and demand situation would improve.