China iron ore surplus likely to increase
Wednesday, 3 June 2009
BEIJING, June 2 (Bloomberg): China, the world's biggest steelmaker, risks exacerbating an iron ore surplus this year after imports exceeded demand, an official from the China Iron and Steel Association said.
"The risk of over-importing is building," Luo Bingsheng, vice chairman of the association, said at a conference in Shanghai today. Iron ore imports in the first four months exceeded actual demand by 27 million metric tons, he said. The global iron ore surplus may be between 200 million tons and 300 million tons this year, he said.
Purchases of iron ore and metals have increased as China's government begun to spend 4 trillion yuan ($586 billion) on housing, transportation infrastructure and other projects. China boosted iron ore imports to a record in April for a third month.
An oversupply of the raw material should prompt Chinese steelmakers to demand a bigger cut in iron ore prices than agreed by Japanese rivals, Shen Wenrong, the chairman of Jiangsu Shagang Group Co., said May 27.
There are "huge stockpiles" at Chinese ports and producers shouldn't accept the Japanese steelmakers' accord with Rio Tinto Group for a 33 per cent cut, Shen said.
China's steel producers are still in talks with iron ore suppliers and they are implementing a "new plan" for the discussions, which should be completed by the end of June, Luo said earlier today. He did not elaborate on what the new plan will entail.
The country's major ports unloaded 24 per cent more of the imported steelmaking ingredient in April from a year ago, a record for a second month. Ships dropped 53.5 million tons of iron ore at major ports, the Ministry of Transport said May 6. That beats the March record of 51 million tons.
Stockpiles at the nation's major ports reached 62 million tons in April, the statement said. Imports for that month jumped 33 per cent to 57 million tons from a year earlier, the customs office said May 12.
Almost 40 per cent of China's 72 biggest steel mills had losses in April, the Ministry of Industry and Information Technology said May 22. The steelmakers had a combined loss of 5.2 billion yuan in the first four months, it said.
"The risk of over-importing is building," Luo Bingsheng, vice chairman of the association, said at a conference in Shanghai today. Iron ore imports in the first four months exceeded actual demand by 27 million metric tons, he said. The global iron ore surplus may be between 200 million tons and 300 million tons this year, he said.
Purchases of iron ore and metals have increased as China's government begun to spend 4 trillion yuan ($586 billion) on housing, transportation infrastructure and other projects. China boosted iron ore imports to a record in April for a third month.
An oversupply of the raw material should prompt Chinese steelmakers to demand a bigger cut in iron ore prices than agreed by Japanese rivals, Shen Wenrong, the chairman of Jiangsu Shagang Group Co., said May 27.
There are "huge stockpiles" at Chinese ports and producers shouldn't accept the Japanese steelmakers' accord with Rio Tinto Group for a 33 per cent cut, Shen said.
China's steel producers are still in talks with iron ore suppliers and they are implementing a "new plan" for the discussions, which should be completed by the end of June, Luo said earlier today. He did not elaborate on what the new plan will entail.
The country's major ports unloaded 24 per cent more of the imported steelmaking ingredient in April from a year ago, a record for a second month. Ships dropped 53.5 million tons of iron ore at major ports, the Ministry of Transport said May 6. That beats the March record of 51 million tons.
Stockpiles at the nation's major ports reached 62 million tons in April, the statement said. Imports for that month jumped 33 per cent to 57 million tons from a year earlier, the customs office said May 12.
Almost 40 per cent of China's 72 biggest steel mills had losses in April, the Ministry of Industry and Information Technology said May 22. The steelmakers had a combined loss of 5.2 billion yuan in the first four months, it said.