Large Chinese purchasing machine iron ore I could be hesitant. Imports of raw materials which fuel the world's largest steel industry are threatened to decline this year for the first time since 2010, although official figures show that the factories produced unprecedented amounts of steel.
Estimated declines are an indication that the plant is reviewing its production, which includes ordering higher grade iron ore mixtures and increasing the use of steel scrap, according to Liberum Capital Ltd. In the first nine months of imports this year decreased 1.6%, to 803.3 million tons. It is expected that on Thursday the data on the October flow will be released.
The global iron ore market relies on China, which accounts for around 70% of shipping companies such as BHP Billiton Ltd., Rio Tinto Group, and Vale SA. Since the beginning of this century, the trade in raw materials has exploded, rising from 70 million tons in 2000 to more than 1,000 million tons, while steel production has experienced a rapid increase in Asia's main economy.
Now there are indications that the explosion could peak when economic growth slows and at the time when fighting pollution leads to steel mills leaning against high-grade iron ore and steel.
The use of these two materials, coupled with an increase in steel mill operations before reducing supply in the winter, explained the steel production record, Richard Knight, an analyst at Liberum, said in an e-mail. The addition of more legal capacity for steel production could also be key to reconciling "large numbers for steel production with flat iron ore imports and pig iron production," he said.
The Australian government – which said it expects Chinese steel production to peak this year – forecast a decline in annual iron ore imports, according to a report on the latest quarterly outlook.
After reaching 1.075 million tons in 2017, shipments will drop to 1,059 million this year and to 1,021 million by 2020. The country is the largest exporter of iron ore in the world.
CRU Group also estimates that annual imports
will decline – around 20 million tons, according to
company calculation, which shows that
Continental steel production.
"China's crude steel production this year has been reduced by between 1% and 2% year-on-year in the first eight months," said senior analyst Erik Hedborg. "The official figures, however, show that crude steel production has increased between 8% and 9%."
Figures from Australia's most active bulk export port showed a slowdown in Chinese appetite last month, although flows remained higher throughout the year. Port Hedland shipments aimed at China were 32.8 million tons, compared with 35.2 million in the same period last year, according to data released on Tuesday. So far this year they have grown by 1.9%.
Among mining companies that use terminals are BHP and Fortescue Metals Group Ltd.