It is reported that China's iron ore imports may exceed expectations in 2007 as rising steel output increases demand. Mr Fabio Barbosa CFO of Cia Vale do Rio Doce said that China may import 400 million tonnes of iron ore about 5% more than previously forecast as its steel output may rise to 500 million tonnes, 30 million tonnes more than forecast.

Mr Barbosa based his estimates on Chinese government tallies of steel production and iron ore imports for the first four months of 2007. Mr Barbosa during an event promoted by finance industry trade group Apimec at S Paulo said that Chinas purchases from overseas reached some 134 million tonnes of iron ore in January to April up by 23.5% YoY as compared to January to April 2006. He added that "There are no signs of a slowdown in May."

Mr Barbosa said that China's economy is growing more than 10% a year, driving up prices for steel, iron ore, coal and other industrial raw materials. Government efforts to slow steel output growth by shutting old inefficient and polluting mills show no effect' and Rio de Janeiro-based Vale may have difficulty supplying enough iron ore to meet China's needs. He said "the market for iron ore is unbalanced and the market will have to adjust to those pressures.''

CVRDs iron ore output will rise by 70% to 450 million tonnes in 2011 from 264 million tonnes in 2006. Its output is expected to rise by 14%in 2007 to 300 million tonnes. CVRD expects to ship 100 million tonnes of ore to China this year a third more than in 2006.