Metal Products News
- Iron ore price likely to rise again in 2007
Date: 14-Dec-2006 Sources: (Xinhua Online)
Critical iron ore price negotiations have kicked off with analysts forecasting a moderate price rise in 2007 despite China's efforts to reduce the price.
Outraged by the massive 19 percent price hike last year, China hopes to achieve more acceptable price levels in 2007.
Customs figures show China's iron ore imports dropped 1.3 percent year-on-year to 21.97 million tons in October, 22 percent lower than last month, easing the country's dependence on external supplies.
While total imports from January to October climbed 21.7 percent from last year to 269 million tons, the rate of increase was nevertheless the lowest in recent years.
Domestic production rose sharply in the first nine months, helping to ease the pressure from overseas suppliers.
The combined output of large-scale mines in China hit 406 million tons from January to September, 37.7 percent higher year-on-year.
Industry consultancy Mysteel predicted home-made iron ore will take up a larger share of the domestic market.
Analysts said India's growing contribution to imports will also affect prices. India exported 46.75 million tons to China in the first nine months, taking 26.56 percent of the total market.
India's iron ore exports for the whole year are expected to exceed 100 million tons.
Despite China's arguments, the world's leading providers including Rio Tinto, BHP, and Companhia Vale do Rio Doce (CVRD) are likely to insist on a price hike citing tight supply and voracious demand.
Mysteel deputy manager Jia Liangqun predicted the iron ore price would rise 3 to 5 percent next year as China replenishes stocks.
Insiders said the global steel and iron industry is cooling down. Prices may fall in the near future as a result of an industry glut.
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