July 05, 2008

Growth in Chinese iron ore imports to slow down - Huatai Securities

A research report released by Chinese securities dealer Huatai Securities Co Ltd predicted that the growth rate of China's iron ore imports will decline in 2008 although the absolute import quantity will continue to increase.

The report estimated that China's crude steel output in 2008 will reach 540 million tonnes up 10.89% YoY over that in 2007 and pig iron output at 520 million tonnes up about 10.8%. Calculated at the ratio of 1:1.6 for iron ore consumption, it estimates the country's iron ore consumption in 2008 will increase by some 80 million tonnes over 2007 and China's raw iron ore production is estimated at 807 million tonnes in 2007 up by 15.46% YoY over 2006.

Huatai Securities predicts this figure will hit about 902 million tonnes in 2008, an increase of some 100 million tonnes over 2007, which could be converted into about 33 million tonnes of newly increased concentrates at 33% grade. That is to say, an additional 47 million to 48 million tonnes will still depend on imports in 2008, and the import growth over 2007 is estimated at 12% much lower than that in 2007.

The report also predicts China's import dependence on iron ore will decline with a pending slowdown of growth in crude steel production.