fe ore demand

This report is not good news for steel suppliers to China
but very good for suppliers of Fe ore. It does not mean China's demand for steel is dropping markedly, although their economy is slowing a little. Like only increasing at a rate of about 9%pa rather than a very inflationary dangerous 12%.
Their rapidly growing steel making industries will be clamouring for feedstock.

AAP 06:28:00 4415 05/07/2005 European steel makers cut output amid slowing demand from China
AAP News
6:28:020 5/07/2005
by Nicolas Revise
PARIS, July 4 AFP - European steel manufacturers have reduced
their production levels in 2005 in response to a global slowdown in
demand and an increase of production capacity in China, the main
export market during the record year of 2004.
One by one last week, Europe's largest manufacturers announced
cuts in production for the third quarter of 2005, following on from
reductions in the second quarter.
The world's largest producer Mittal Steel said on Wednesday that
it would reduce production by a million tonnes in the third quarter
in order to "re-establish a balance between global offer and
demand" and "help reduce stocks".
A day later, German group ThyssenKrupp announced a cut of
120,000 tonnes of stainless steel production in the third quarter,
the equivalent of 20 percent of its European capacity, following a
500,000-tonne cut in the second quarter.
Finally, the world's second-largest producer Arcelor followed
suit and unveiled its own production cutbacks. Stainless steel
production has been reduced by 15-20 percent since April, the
company said on Friday.
Two factors explain the move to drastically pull back
production: China, which was an insatiable importer of European
steel during 2004, is becoming less dependent on imports as its own
production comes on stream, and
worldwide stocks have built up that are beginning to depress
prices.
A recent report in the Financial Times detailed Chinese plans
for a further three new steel manufacturing plants with an annual
capacity of 16.5 million tonnes which will substitute imports for
Chinese-made steel.
The International Iron and Steel Institute, an industry
organisation based in Brussels, estimated that Chinese production
of steel grew by 37.5 percent in May on a 12-month basis.
Production leapt to 29.7 million metric tonnes, equivalent to about
one third of world production.
China is now the world's largest producer of crude steel, but
lacks the technology to produce value-added high-quality steel.
"China's production deficiency should continue (in these
areas)," said Jean-Jacques Limage, analyst at Fideuram Wargny. He
warned that "the overheating of its economy could lead to a
reduction in (overseas) demand", however.
For other analysts, the cutbacks are a simple adjustment to real
demand after the boom year of 2004, which was partly driven by
speculative buying in anticipation of demand from China.
Over 2004, when prices were on a constant upward path, "the
apparent demand was higher than real demand", according to Thierry
Lefrancois, analyst at Natexis.
This year, demand has fallen as Chinese imports of steel have
slowed, but it is above all "steel producers which are bringing
their stocks down to a normal level", he explained.
"Clients believe that prices are going to fall so are waiting
for the best moment to buy," said Lefrancois.
AFP