Iron ore imports expected to hit new high in March

13:17, March 03, 2010      

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In the context of heated iron ore pricing negotiation, iron ore price hike in the international market and stable freight, China's iron ore imports is expected to reach 600 million tons in March, 2010, hitting a new high.

"Over 600 million tons"

In January, China imported 466.2 tons of iron ore, up 59.7 percent, or 1397 million tons year on year. Compared with the previous month, daily ore imports fell 25 percent.

Industrial insiders predicted that ore imports in February would be lower but will recover in March.

"We expected that iron ore imports in March will reach 600 million tons, and annual imports will hit a new high," said Hu Kai, a senior analyst with Umetal.com. Domestic steel mills' imports before the Spring Festival holiday were very limited, and the three global ore giants reduced supply of iron ore with the long-term contract. In addition, China's steel output will continue to rise in 2010.

Mysteel.com and Xiben New Line Stock Co., Ltd. also agreed with Hu's expectation.

Price of iron ore fines (63.5 percent FE content) imported from India rose to 140 to 145 U.S. dollars per ton on March 2, hitting a 20-month high.

Xiben New Line Stock pointed out that the long term contract price for iron ore would inevitably rise in 2010.

Limited growth in domestic ore supply

A senior analyst with Mysteel.com noted that domestic iron ore producers would witness notable profits after iron ore prices in the global market exceeded 100 U.S. dollars per ton. "Domestic iron ore supply will increase by 500 million tons."

Data from Xiben New Line Stock showed that domestic iron ore output grew 40.2 percent to 882.48 million tons last December. Local small and medium-sized iron ore suppliers generally ceased production from January to February. In March, their production will recover and iron ore supply will record a considerable increase.

However, domestic iron ore output only grew 8.9 percent in 2009. With domestic iron ore miners' hiking costs, more steel mills turned to imported iron ore. In 2009, China's iron ore self supporting rate fell to 30 percent, 20 percentage points lower than the previous year.

By People's Daily Online
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