China expects iron ore price cut From correspondents in Beijing AAP November 04, 2008 06:52pm Text size + - Print Email Share Add to MySpace Add to Digg Add to del.icio.us Add to Fark Post to Facebook Add to Kwoff What are these? CHINA expects international iron ore prices to plummet next year amid falling demand from its steelmakers stung by the global economic downturn, state media reported today. "China's iron ore inventory at harbours and enterprises has reached 89 million tonnes, which is at saturation levels,'' said Luo Bingsheng, vice chairman of the China Iron and Steel Association, according to the Securities Times.
"The situation will prompt Chinese steelmakers to cut iron ore imports to reduce procurement costs,'' he said.
Analysts said iron ore prices were likely to be lower in annual price negotiations next year between Chinese buyers and world iron ore producers, the report said.
That would mark the first price drop in nine years, due largely to production cuts by the world's major steel plants including Chinese producers, it said.
Leading Chinese producer Baosteel has followed other steel firms in reducing output, a report by the China Securities Journal said.
The company has postponed the reopening of a furnace - closed for maintenance - with an annual capacity of five million tonnes, it said.
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The steel industry booked a loss of 1.2 billion yuan ($261 million) in the first nine months, 18 times the loss seen over the same period in 2007, due to shrinking demand from the real estate and auto sectors, it said.
China's economic boom and the country's resulting need for raw materials has been a major factor in driving up prices of iron ore and other such materials worldwide in recent years
