Just more fear mongering from plodders who would have a self interest in pushing the garbage, this is how I see it:
China's steelmaking facilities have predominantly been built in the last 15-20 years, 90% of those are Blast Furnace technology(BOF) requiring IO as its main resource input with the remaining 10% being Electric Arc Furnace(EAF) requiring scrap metal as its main resource input. EAF technology has been around since the 1960's, Smorgons built the first EAF at Laverton in Melbourne in 1983, BHP commissioned their first EAF in 1991 at Rooty Hill in Western Sydney.
So when China developed their large steelmaking industry they chose predominantly to go with BOF despite capital costs for BOF being 300 to 400% higher than EAF. In 1999 China produced around 120m tons of steel, in 2011 it produced 683m tons so a massive increase in capacity in 10 years or so.
Why did China make that expensive capex decision to go with BOF instead of EAF ?
Two reasons, first is they would never have been able to source the required scrap metal if the majority were EAF, scrap metal prices would have skyrocketed. Secondly EAF's also don't traditionally produce high quality steel due to the inconsistency with scrap quality, Chinese are not known for their high quality production standards and that includes its steel and ultimately scrap metal(article below showing what can happen in China, many countries won't allow Chinese steel to be used in infrastructure projects).
Through necessity of ongoing raw material supply China had to build BOF steelmaking facilities to meet world standards and it knew it had a good supply of Iron Ore from a neighbour close by, Australia.
The EAF's at Rooty Hill and Laverton in Melbourne owned by Infrabuild(formerly Arrium/Onesteel) use 100% scrap metal, this is the standard practice with EAF's around the world except surprisingly in China where their EAF's use 70-80% molten iron(Iron Ore) due to lack of scrap metal and I assume end quality steel purposes. Scrap metal prices currently at over US$500 a ton, if China tried to significantly increase their consumption of scrap metal then that price would double as EAF's around the world need to feed their furnaces to produce steel.
So despite what spin, fear and BS you may read in mainstream media which those responsible would have a vested self interest in pushing, due to the dynamics of China and the worlds steelmaking facilities China will continue to purchase Australian Iron Ore as it makes the most operational and commercial sense as it did 20 years ago when China started aggressively increasing its steelmaking capacity. They want to open their old mines and grab low grade IO they can, it won't make any difference to the market price of IO and ultimately leads to all sorts of environmental and commercial issues in their own country.
Would also be careful that what Chinese officials are quoted as saying as it may be just more made up BS.
The leaders of BHP, RIO, FMG, Vale, etc understand the big picture, they are playing it perfectly by just continuing to produce and export while encouraging politicians to keep dialogue with China and ensuring positive business relationships with the Chinese buyers. They know it's important that China don't appear to be losing face, ultimately the Iron Ore market sets the prices through the old supply and demand fundamentals.
Steelmakers around the world making record profits including in China on back of strong demand , unless Covid II gets rolled out by the media or a conflict takes place then everything is looking rosy for Iron Ore miners and steelmakers in my opinion.
(20min delay)