China risks iron-ore surplus
mining-journal.com
Publishing Date
02 Jun 2009 12:45pm GMT
Author
Mining Journal
China, the world’s biggest steelmaker, risks exacerbating an iron-ore surplus this year after imports exceeded demand, an official from the China Iron & Steel Association said.
“The risk of over-importing is building,” Luo Bingsheng, vice-chairman of the association, said at a conference in Shanghai. Iron-ore imports in the first four months exceeded actual demand by 27Mt, he said. The global iron-ore surplus may be between 200Mt and 300Mt this year, he said.
Purchases of iron ore and metals have increased as China’s government begun to spend Yu4 trillion (US$586 billion) on housing, transportation infrastructure and other projects. China boosted iron-ore imports to a record in April for a third month.
An oversupply of the raw material should prompt Chinese steelmakers to demand a bigger cut in iron-ore prices than agreed by Japanese rivals, Shen Wenrong, the chairman of Jiangsu Shagang Group Co, said.
There are “huge stockpiles” at Chinese ports and producers shouldn’t accept the Japanese steelmakers’ accord with Rio Tinto Group for a 33% cut, Mr Shen said.
China’s steel producers are still in talks with iron-ore suppliers and they are implementing a “new plan” for the discussions, which should be completed by the end of June, Mr Luo said earlier today. He did not elaborate on what the new plan will entail.
The country’s major ports unloaded 24% more of the imported steelmaking ingredient in April from a year ago, a record for a second month. Ships dropped 53.5Mt of iron ore at major ports, the Ministry of Transport said last month.
That beats the March record of 51Mt.
Stockpiles at the nation’s major ports reached 62Mt in April, the statement said. Imports for that month jumped
33% to 57Mt from a year earlier, the customs office said.
Almost 40% of China’s 72 biggest steel mills had losses in April, the Ministry of Industry and Information Technology said. The steelmakers had a combined loss of Yu5.2 billion in the first four months, it said. |
