China's iron ore imports slow down

China is still importing shiploads of iron ore but imports are slowing down.

While imports for the first nine months of the year were up a hefty 24.2 percent on the same period last year, this is the first time since 2003 that the import growth rate has dipped under the 30 percent bar, a senior commerce official told Xinhua on Tuesday.

China imported 247 million tons of iron ore in the first three quarters, said director Lu Jianhua of the Ministry of Commerce's Foreign Trade Department.

Lu predicted that total iron ore imports for the year would be around 320 million tons. Import growth for the year is expected to be 12 percentage points lower than last year.

Lu attributed the slowdown to China's rising domestic supply.

He said that the growing domestic supply has helped drive down the average cost of imports by 7.2 percent to 62.70 US dollars.

After iron ore prices surged 71.5 percent last year, costing China -- the world's largest iron ore importer -- an additional 570 million US dollars, the country has been demanding a bigger say in setting global benchmark prices.

China has been very active in negotiations with top international providers Companhia Vale do Rio Doce, BlueScope and Hammersley Iron. It only reluctantly agreed to a further 19 percent rise in iron ore prices this year.

"A new oversupply situation is brewing. Iron ore prices are going to slip back," Lu said.

Price hikes for four consecutive years have been a windfall for mine owners. However, iron ore consumers such as steel mills had to struggle with razor-thin profitability margins and the risk of losing money, he said.

Lu said that the world's major suppliers and consumers should all take a long-term approach and establish a "stable and healthy cooperative relationship" in price negotiations.

"We hopes all parties will team up with Chinese enterprises to secure rational and reasonable raw material prices, safeguard a fair global trade order and achieve common prosperity," he said.

Source: Xinhua