Bloomberg quoted Macquarie Group Ltd said iron ore imports to China, the world biggest consumer of the raw material may rebound next year as Brazilian and Australian producers increase supply.
Macquarie analyst Mr Graeme Train said “The growth in iron ore consumption will come from increases in seaborne supply. China will import every ton of ore available to it on the seaborne market as a first choice and the gap between its total demand and seaborne availability will then be filled with domestic production.”
Mr Train said in a slide for the conference in Shanghai Global seaborne supply of iron ore may rise 8.5% to 1.1 billion tonnes next year. Chinese demand may rise 15% to 712 million tonnes in 2011, compared with a forecast 5.4% drop in Europe.
He said that “Steel production outside of China has recovered in 2010. That has reduced availability of seaborne ore to China. He added that China domestic ore production on a 62%iron equivalent basis and will remain at around 300 million to 320 million tonnes annually over the next three years.”
Customs data show china iron ore imports fell 2.2%YoY to 503.3 million tonnes in the first ten months, as government measures to curb speculation in property trimmed demand and provinces including Hebei, Shandong and Zhejiang restricted power to mills to meet energy consumption targets. Still, demand growth is expected to remain robust even as economic expansion slows.