SMM News: as the world's largest supplier of iron ore in China, the Australian government recently predicted that China's steel production will peak in 2018, followed by a decline in domestic demand, steel production will shrink next year.
China has accounted for more than half of the world's steel production for the past 15 years and has made huge profits for BHP Billiton, the world's largest miner. With the gradual growth of China's economy, the economic growth rate is slowing down year by year. In the future, iron and steel demand has become a hot issue of concern in the industry.
The Australian government expects China's steel production to fall from 886 million tons this year to about 800m tons by 2023. BHP Billiton does not expect steel production to peak until mid-2020, perhaps reaching a height of 1 billion tons.
"even if the forecasts are wrong, this year will be a year of high steel production, and such high production will continue for quite a long time, and demand for iron ore will remain strong," Mike Henry said. "
BHP Billiton and rival Rio Tinto have a huge iron ore business, which dominates Western Australia's economy, including a vast economic rail network and huge port infrastructure. Both companies have made handsome profits from China, especially as it reforms its domestic steel industry, which is now more focused on higher-quality and less polluting iron ore.
On the brewing trade tensions between China and the US, Henry said BHP Billiton had not seen any negative impact on coal and iron ore sales.
"in terms of actual demand, it has no impact at all," he said. "you see that steel start-up rates continue to be very high, and demand for iron ore and coal in China is still strong. The only commodity affected may be copper, which is seen as the leader of the economy and has a stronger financial attribute. "
