Overseas purchases of iron ore by China, the world's largest importer of the raw material, may gain 10 percent next year, about half this year's rate, as domestic production rises, an industry association says.
Imports of the steel-making raw material may climb to 358 million tons from an estimated 325 million tons this year, Zou Jian, chairman of China Metallurgical Mining Enterprise Association, said at a conference in Beijing today. Iron ore imports in 2005 totaled 275 million tons.
Rising ore demand from China, the world's biggest steel producer, has helped to push contract prices of the commodity to a record. The country makes about 80 percent of its steel in blast furnaces, which use iron ore, compared with a global average of 60 percent, according to consultant MEPS Europe Ltd.
China's domestic iron ore production this year is about 550 million tons, with an iron content of about 33 percent or less, compared with 65 percent for ore from Australia, the world's biggest supplier, Zou said.
China is to strictly monitor iron ore imports, restricting them from flowing to obsolete plants and the plants to be shut down by the government in a move to curd over capacity in steel making, Chen Xianwen, deputy director of marketing and research division of China Iron and Steel Association, said at the conference today.
Benchmark for import qualification is to be raised and the number of licensed importers reduced, Chen also said, without elaborating on details. Currently there are 118 import license holders in China, according to Chen.
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