Report: Chinese iron ore market slowdown from production, consumption and imports falls
The iron ore production in China is set to fall to 286.2 million tonnes (Mt) from 2015 to 2020, compared with 345Mt in 2014, according to a report by Timetric.
Entitled Iron Ore Mining in China to 2020, the report reveals that the slump in iron ore prices in 2014 resulted in a weakening of activity in the iron ore industry as approximately 33% of Chinese iron ore mines in Hebei remained idle. Chinese iron ore consumption will be affected by a fall in domestic steel production, which has been impacted by low demands and the introduction of a new environmental protection law (EPL).
China’s iron ore consumption is estimated to reach 1,026.9Mt by 2020 indicating a decline from 1,139.6Mt in 2015. The consumption was slightly higher in 2014 at 1,152Mt, driven mainly by a 5.6% increase in domestic steel production.
Key steel producers operating in Chinese provinces of Hebei, Jiangsu and Shandong are expected to cut back on production leading to 733.5Mt of steel production in 2020.
A downturn in global steel demand, crude steel production and iron ore prices will result in a fall in Chinese iron ore imports to 855.1Mt in 2020, according to the Timetric report. High-quality Australian and Brazilian ores and concentrates are giving stiff competition to the domestic ores as Chinese steel mills prefer the higher grade product.
Chinese iron ore imports were at 932.4Mt in 2014 and were estimated to further rise at the end of 2015 backed by year-end infrastructure investments.
China was among the top five countries in terms of crude iron ore reserves with 23 billion tonnes and accounted for 12.3% of the global total in 2015. The main Chinese provinces where iron ore reserves are concentrated include Liaoning, Sichuan, Hebei, Inner Mongolia, Shanxi, Shandong, Anhui, and Gansu.