According to Mr Wu Xinchun vice general secretary of China Iron and Steel Association, iron ore resource will be oversupplied by over 70 million tonnes this year and the imported iron ore price is estimated to decrease in March and April.

Mr Wu believes the iron ore supply trend in 2011 will see tightness at first and then ease thereafter. He said the overpriced iron ore is to drop in March and April.

According to CISA, the overall iron ore supply in 2011 will be balanced.

In addition, Mr Wu said the newly added domestic iron ore output in 2011 would reach 30 million tonnes adding the excess imported iron ore, 40 million in 2010 will be used in production in this year and the oversupplied iron ore output in 2011 will hit 70 million tonnes.

According to data, the average imported iron ore quality in 2010 was 61.7% down 0.57% than that of 62.27% in 2009. Responding to the deceasing quality of imports, CISA is planning to design iron ore import standard given the imported iron ore overall quality have been decreasing.

Analysts generally consider CISA was sending warning to those steel mills and traders who have been engaging stocking up iron ore resources and are not willing to sell.

(Sourced from MySteel.net)
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