China's iron ore imports are expected to reach its first decline in ten years in 2010

Since 2000, China’s iron ore imports have continued to increase, but continuously soaring prices have also made Chinese steel mills overwhelmed. Industry insiders here on the 19th China Steel Market Outlook and "My Steel Network" annual meeting pointed out that China's iron ore imports in 2010 is expected to usher in the first decline in 10 years.

Statistics show that in 2000 China's iron ore imports were only 69 million tons, and by 2009 it had grown to 627 million tons. Accompanied by the sharp increase in imports, the rapid rise in iron ore prices. Luo Tiejun, deputy director of the Department of Raw Materials of the Ministry of Industry and Information Technology, pointed out that from 2005 to 2010, China's steel price index rose by 33%, while the ore price rose by 116% over the same period.

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The decline in iron ore imports is related to the Chinese company's flexible strategy to cope with high ore prices. Shen Yinuoguo’s chief researcher Zhao Xiang’e observed that in the third quarter, when contract mine prices rose to the highest in the year, most steel products would lose money, but the actual situation was better than expected. “The steel mills learned to purchase the band: When the mine price is low, buy more, and when it is high, buy less. Like the import mine ratio in July is only 40%, and last year was 69%.” Some industry insiders pointed out.

After a difficult 2010, what will happen to the iron ore market in 2011? "Because of the increase in production plans for all three major mines next year, Japan and South Korea's steel mills will reduce their competition for supply after completing the restocking. Therefore, the tight supply of iron ore will gradually ease, and the prices may be in a downward trend. Gao Bo said.

However, there are also many unfavorable factors. For example, typhoons that may occur in Australia in the first quarter will affect shipments, and some countries such as India and Iran will raise tariffs to limit iron ore exports. Therefore, even if the price of iron ore falls, it will not be too large.

For some mining giants to "tender" to push the spot price of iron ore, the industry also expressed concern. Under the “tendering” model, steel mills competed for high prices and traders followed suit. The iron ore market experienced a drop in demand and a grotesque price increase. “The steel industry should unite to resist the proliferation of bidding models, and the government should also introduce measures to control the vicious bidding.” Insiders suggested.