Wu Dongying, director of the economic and management research insititute of major Chinese steelmaker Baosteel Group, has stated that, influenced by high costs, average steel prices in China in 2011 will be slightly higher than in 2010. In addition, he said that, while iron ore contract prices will be slightly higher in H1 2011, they will indicate a decrease in H2.
Mr. Wu said that in 2009 crude steel output capacity in China reached 718 million mt, while in 2010 it is expected that 40 million mt of new output capacity will start production and that capacity totaling 8.764 million mt will be eliminated. Thus, Chinese crude steel output capacity will reach 750 million mt in 2010. In 2011, Chinese crude steel output capacity is expected to increase by a further 20-30 million mt, he said.
Meanwhile, Mr. Wu estimated that China's semi-finished steel export volume in 2010 will be equivalent to 18.8 million mt of crude steel, while the major target markets for exports are expected to indicate a shift from the US and Europe to other new markets.
In addition, the Baosteel official said that in 2010 China will import 600 million mt of iron ore, rising to 630 million mt in 2011, up five percent year on year. As for the origin of China's iron ore import supplies, the volume of ex-Australia iron ore will increase, ex-Brazil iron ore supplies will be stable, while there will be a slight decrease in iron ore supplies from India.