China may reduce iron ore imports from India

DALIAN (China): China's iron ore imports, including that from India, are expected to be sluggish this year due to rising domestic supply and decline in the growth of Chinese steel output capacity, industry insiders say.

The country's import of iron ore rose to 187.9 million tonnes in the first six months this year, up 16.46 per cent year-on-year.

Australia continues to be the biggest exporter to China, accounting for 37.95 per cent of the country's total imports, followed by India, Brazil and South Africa.

The output of large and medium-sized mines in China rose 29.28 per cent to 321.28 million tonnes in the first half while the output of small mines was around 50 million tonnes.

"The large scale of mining by domestic steel companies is expected to curb further rises in ore prices," China Daily quoted Mr Chen Xianwen, an official from the China Iron & Steel Association (CISA), as saying at the International Iron Ore Market Semina r in Shanghai yesterday.

"The domestic demand for iron ore is expected to increase around 70 million tonnes this year. Apart from the domestic output growth, of around 40 to 45 million tonnes, we need only 30 million tonnes more from overseas, which rose only nine per cent from last year," said Mr Zou Jian, chairman of the China Metallurgical Mining Enterprise Association, at the seminar.

China is the world's largest steel producer and biggest importer of iron ore. Iron ore is India's No.1 item in the export basket. "Large drops are expected in steel prices in 2009 because of the projected slowdown of world economic growth," Mr Chen said . - PTI