China's Iron-Ore Imports Will Grow 15% This Year, SSY Says
Jan. 13 (Bloomberg) -- Chinese imports of iron ore for use in steelmaking will expand by 15 percent in 2005 as China increases steel output, shipbroker Simpson Spence & Young said.

Iron ore imports will rise to 240 million tons as the world's fastest growing economy starts new steel mills, SSY told a meeting held by the Organization for Economic Cooperation and Development today in Paris.

The iron ore mining industry will maintain its status as the leading growth area for the shipping industry, SSK said in an e-mailed report used as a presentation at today's conference.

Melbourne-based BHP Billiton Plc, the world's largest mining company, Rio de Janeiro-based Vale do Rio Doce and London- based Rio Tinto Plc will boost their iron ore mining capacity by more than 150 million tons a year in the next four years to meet higher demand from steelmakers, SSY said.

China's steelmakers will raise output of the metal used in washing machines and cars by 12 percent to 303 million tons this year, SSY said, and by a further 7 percent in 2006.

Steel demand growth in China may slow to an annual 7 percent to 8 percent this year and next, compared with as much as 25 percent a year between 2001 and 2004, SSY said.

Iron ore prices, which rose 19 percent last year, may increase 20 percent this year to $30 a ton, Morgan Stanley said in a Nov. 15 report. World Steel Dynamics said surging coking coal and iron ore prices will likely add $35 a ton to integrated steel mill costs next year.

Imports of coking coal, another ingredient in steelmaking, will grow as much as 20 million tons a year this year and next as China boosts its steelmaking capacity, SSY said.



To contact the reporter responsible for this story:
Matthew Craze in London at mcraze@bloomberg.net.

To contact the editor responsible for this story:
Stephen Farr at sfarr@bloomberg.net
Last Updated: January 13, 2005 12:44 EST