Institutes: Iron Ore Demand to Decline in 2018 with China’s De-capacity Policy and Production Limit

SHANGHAI, Dec.7 (SMM)－China’s iron ore demand in 2018 is expected to decline due to the country’s various regulations, according to analysts forecast at the 2018 China Steel Industry Chain Summit Forum on Dec 6.

On the one hand, new supply of iron ore is expected to reach 38 million tons in 2018 following the expansion projects of Vale, Rio Tinto, BHP Billiton and FMG. On the other hand, iron ore inventories at 42 major Chinese ports have exceeded 100 million tons since the start of this year, and the volumes are likely exceed 160 million tons during the current quarter.

On the demand front, China’s supply-side reform and de-capacity policies have eliminated some 100 million tons of steel capacity over the past two years.

In fact, the demand for iron ore is estimated to reduce by 46 million tons during the six-month period to March 2018 due to China’s production limit plans in “2+26” cities during the winter season, according to Custeel calculations.

In addition, steel scrap usage is another factor likely to impact China’s iron ore demand, analysts said at the conference.

In 2018, China’s imported iron ore is estimated to reach 1.12 billion tons, up 3% year-on-year. However, the volume growth is 2.5% lower than that in 2017, according to Lei Pingxi, general engineer of China Metallurgical Mines Association.

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