china's iron ore projects under construction, page-4

Shanghai. December 5. INTERFAX-CHINA - Iron ore stockpiles at China's 22 major ports stood at 65.98 million tons on Friday, Dec. 5, down 2.73 percent from Nov. 28, while Indian iron ore stockpiles dropped by 1.75 percent to 14.05 million tons, according to figures released by Shanghai-based Mysteel.

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Cash prices of iron ore imported by China, the world’s biggest buyer of the steelmaking ingredient, rose for a fourth week, gaining 1.7 percent after the government announced a 4 trillion yuan ($586 billion) stimulus package.

Prices at Qingdao, China’s biggest iron ore port, advanced to 610 yuan a metric ton, according to Beijing Antaike Information Development Co. Prices gained 13 percent in November.

China is investing in housing, railways, roads and airports to bolster slowing growth in the world’s fourth-largest economy, raising expectations steel and metals consumption will increase.

“Steel prices have stabilized as demand for some products, such as construction steel, is recovering,” Ma Haitian, analyst at Antaike, said by phone from Beijing today. Construction steel prices have gained 10 percent to 3,600 yuan a ton from its lowest level in October, he said.

Cash prices of iron ore are still down 60 percent this year. China buys most of its spot iron ore from Indian producers. Long-term contract iron ore prices may drop 40 percent next year because steelmakers are cutting demand, UBS AG has forecast.

Antaike is the research affiliate of China Nonferrous Metals Industry Association.

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Nov. 12 (Bloomberg) -- China's iron ore imports may fail to increase next year for the first time since at least 1999 because of slowing demand from steel mills, an industry group said.

Imports may remain at 400 million metric tons next year, unchanged from 2008 levels, Zou Jian, chairman of the China Metallurgical Mining Enterprise Association, said in an interview yesterday in Beijing. The demand slump will show up in import figures in the next two months, he said.

China this week announced a 4 trillion yuan ($586 billion) stimulus plan to revive growth in the world's fourth-largest economy, investing in housing, railways, roads and airports. Contract iron ore prices may drop next year, the first in seven, hurting profits at Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton Ltd., analysts said.

``Iron ore consumption will keep slowing to at least the first quarter, or even longer,'' said Helen Lau, a Shanghai-based analyst from Daiwa Securities Group Inc. She said the stimulus plan may boost China's iron ore imports to between 400 million and 450 million tons.

Brazil's Vale and Rio Tinto, the world's two largest iron ore suppliers, have announced production cuts because of reduced demand from China. Imports dropped 22 percent in October to 30.6 million tons from the previous month, according to China's Customs General Administration.

Domestic iron ore mines that started in the past five years are losing money, and some have closed, Zou said. More may shutter as prices of the raw material continue to fall, he said.

Although this week's stimulus plan is ``positive,'' it will be difficult to gauge how the market will be bolstered, Zou said.

Falling Prices

Cash prices of iron ore imported by China have tumbled 62 percent since May 9, according to Beijing Antaike Information Development, a research firm. Contract iron ore prices charged by Vale, Rio and BHP may fall 40 percent next year, UBS AG said.

Iron ore contract prices are negotiated on an annual basis. That may change pending discussions between the producers and steelmakers, Zou said. Price talks may be delayed because of the financial turmoil, Nippon Steel Corp., the world's second-largest mill, said Nov. 7.

China will produce between 380 million and 390 millions of iron ore concentrate this year, up from 340 million tons a year ago, Zou said. Chinese ore tends to be of lower quality than those imported from Brazil and Australia, the world's two largest exporters of the raw material.