China's iron ore imports are likely to rise 7.1 percent to a record 1 billion tonnes this year, with the share of top suppliers Australia and Brazil climbing to more than 80 percent, an industry official said on Wednesday. The increased imports would come as China's domestic iron ore supply would likely fall by 70 million tonnes this year, Li Xinchuang, executive vice secretary-general of the China Iron and Steel Association, told an industry conference.
A slide in iron ore prices to their lowest level since 2009 has pushed out high-cost mines in China and elsewhere, allowing Australia and Brazil to ship more to the world's top buyer of the steelmaking commodity. China's crude steel production is forecast to drop 1.1 percent to 814 million tonnes this year, with steel demand already at "peaking stage", said Li.
"This is not a short-term situation but long-term," he said, adding that Chinese steel companies are facing a lengthy period of weak demand growth and low prices. Li said iron ore prices could break $60 a tonne but were unlikely to stay below that level for a long time, predicting prices to average between $65 and $75 this year. A Reuters poll released last week showed iron ore averaging at a record low of $68 this year amid a deepening glut and worries over a sharper economic slowdown in China.