Economic Observer quoted sources with the China Iron and Steel Association said China will boost the domestic supply of iron ore to a large extent during the 12th Five year Plan period (2011-15) in order to rely less on the three world mining giants Vale, Rio Tinto and BHP Billiton.
The sources said the percentage of domestic supply will rise to over 45% by 2015 a substantial rise from the level of 32% in 2010.
Mr Ding Gen senior analyst with custeel.com said that a 13% rise in supply was possible.
Mr Rong Gang chief economist with hbh-steel.com told the Global Times that steel has become a pillar industry in China, having contributed a lot to the fast growth of its economy. China consumes an annual average of 700 million tons of crude steel.
As more than half of China iron ore demand is met through imports, primarily from Brazil and Australia, the pricing of iron ore has become a heated issue.
Mr Luo Tiejun an official with the Ministry of Industry and Information Technology said that a supply guarantee system for iron ore would be written into the steel industry's five year plan and that iron ore supply would be regarded as an issue of national security a move welcomed by industry insiders.
He said that "In 2010, the profits of the big three exceeded the total profits of the 78 largest Chinese steel producers."
Dominance of the global market by the big three firms has resulted in limited profit margins for Chinese steel producers.
(Sourced from Economic Observer)
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