To ensure a regular supply of iron ore and avoid price volatility, China will speed up work on iron ore projects in Africa and Australia, said the Ministry of Industry and Information Technology (MIIT). China should lower dependence on imports of iron ore which is around 80pc of its total requirements. Chinese firms with overseas mines should account for more than 20pc of iron ore imports by the completion of a five-year plan for the steel sector, said MIIT.
The country aims to build a couple of overseas iron ore mines by 2025 to boost supply and also plans to increase the supply of manganese and chrom. The country is dependent on raw material imports, including iron ore and coal. Robust economic growth in China’s has strengthen ore prices, globally. Chinese iron ore production is of a much lower grade than in top producers like Brazil and Australia. Chinese firm owns a stake in the Simandou mine in Guinea.
China looks to settle trade tensions with Australia in the coming days. It will pace up the construction of large iron ore projects in West Africa and Western Australia. It would also look to increase production in the resource-rich Russia, Kazakhstan, Mongolia, Cambodia and other neighboring countries.
With more acquisitions, top five Chinese steelmakers are expected to account for 40pc of China’s total steel output by 2025, while the top 10 will have a 60pc share, up from 37pc now. It will also curb new steel production capacity in China, the MIIT said.
Resumption of scrap imports
China could lower dependence on iron ore imports through increase of ferrous scrap imports. Steel scrap under the customs codes 7204100010, 7204210010, 7204290010, 7204410010 and 7204490030 is not classed as solid waste and can be imported freely from Jan 1, the environment ministry said in a joint statement with other departments. Scrap consumption ratio in electric arc making will rise above 20pc in the coming years. Domestic scrap generation will be as high as 300mn mt by 2025 from 220mn mt at present.