Due to the global slack demand in 2008, the crude steel output of China has plummeted unprecedentedly, which result in a surplus inventory and a nosedive of price.
It seems that china will hold a better position in the negotiation on the price of iron ore next year. But some analysts said that the price of iron ore maybe drop probably, but whether China can benefit a lot remains as an open question.
Firstly, although the domestic output of iron ore increases rapidly, it is far cry from enough. Secondly, the undesirable quality of iron ore inbound fails to satisfy the steel plants. And thirdly, Chinese steel mills find hard to upgrade the efficiency of iron ore, thus demand less iron ore accordingly.
Owing to the above three reasons, China still depends heavily on the import of iron ore in the long run, according to the analysts.