Chinese iron ore imports seen soaring to 1 billion tonnes

Sept30, 2011

Reuters reported that China iron ore imports may surge to 1 billion tonnes by 2015 up around 60% from last year with the world biggest steel producer able to cope with a potential recession in developed economies.

Australian miner Fortescue Metals Group Ltd which sells nearly all of its iron ore to China forecast a rise in Chinese imports to 1 billion tonnes by 2015 at an industry conference in China North Eastern city of Qingdao.

That will be more than 60% higher than China imports last year of nearly 619 million tonnes.

Mr Neville Power CEO of Fortescue said global prices are expected to remain high next year before additional capacity comes online between 2013 and 2015.

Brazil Vale the world No 1 iron ore miner said China robust demand will keep global supplies tight.

Mr Jose Carlos Martins executive director for sales and marketing of Vale said "Vale is still confident in the market fundamentals. He said that besides China, several emerging regions with large population also have strong growth potential. Emerging countries still have a significant gap in housing and infrastructure requirements, indicating strong potential for steel consumption growth in the long run."

Mr Murilo Ferreira CEO of Vale said earlier this month that the miner was not seeing any slowdown in the global iron ore market despite a crippling sovereign debt crisis in Europe and a weak US economy. But analysts say China strength may not be enough to hold up prices.

Mr Graeme Train commodity analyst at Macquarie in Shanghai said "If Europe turns around to Vale and says 'we want 20% less ore this month' then that tonnage finds its way to China so you have China sucking up all the weakness from everywhere."

He said that "The risk though is even if China is buying iron ore and the situation ex China gets really bad and not even China strength can hold the price up at where it is."

(Sourced from Reuters)