West China Metropolis Daily cited Mr Dai Guoqing the former Vice President of the Development & Research Department of Shougang Group recently in a forum focusing on analysis and way out of iron ore talk hardship as saying that "The iron ore price will be unlikely going up all along and the seasonal pricing is unnecessarily the absolute bad thing."
Mr Xu Xiangchun Mysteel analyst argued that the curve of iron ore price behavior is substantially decided by demand and supply relation. Since 2002 when the booming economic development of China gave a fuel to demand for steel products, China has become direly thirsty for iron ore.
Mr Dai said "To control the iron ore price, we must curb demand for it. He said that the climax of China's crude steel production will come soon based on central government's effort in three aspects to examine and clear up financing activities of local governments, to cast aside backward capacities and to macro control the housing sector.”
The three factors will lead to a decline in total demand for steel and steel price will certainly retreat consequently. He predicted that this year the crude steel output will hit 660 million tonnes and it will take no more than two years to reach the peak of 700 million tonnes to 800 million tonnes. When demand for steel declines, imported iron ore price will unlikely always keep rising and in this sense, the seasonal pricing system would have some positive influence on the whole industry.
Mr Zhou Xizeng an analyst with CITIC Securities shared the same point and said that China is the world biggest iron ore importer and also a major producer with 30% supplied by itself last year. China will have more ways at disposal in face of iron ore problems in future.