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Recently, the latest data from the General Administration of Customs show that China's total iron ore import in June accounted for 37.79 million tons. In the first half of this year, the iron ore import was accumulated to 230.04 million tons, increasing by 22.5% as compared with that at the previous year. As indicated by the industry specialist, the import demand for the iron ore in China was dramatically increased due to various factors such as the pessimistic anticipation on iron ore negotiation and continuously increases of the productive capacity in China's steel enterprises.
In view of the continuously increase of the iron ore import, the industry specialist indicates that it is caused due to the low quality iron ore in China, so as not to meet the production as required by the home steel enterprises. As per relevant data, China invests around USD 8 billion on the mineral separation each year. Last year, iron ore output accounted for 350 million tons. It is anticipated that 410 million thereof will be reached this year. China boasts rich iron ore resources; however, the low grade ore is more than the high-grade ore. Thus, as compared with the iron ore in Australia, Brazil, South Africa and India, the cost of mineral separation is higher in China. Therefore, China has to import the iron ore from abroad for a long period of time.
According to the data from the third party, 40% of China's import iron ore was from Australia in the last year. Also, 53% of Australia’s total iron ore export was to China. Currently, China is one of the largest iron ore import countries in the world and mainly imports the iron ore from Australia, Brazil and India.
As indicated by the specialist, the iron ore import is dramatically increased this year due to the reasons as below: the iron ore cost negotiation in this year is unable to reach the conclusion quickly, so as to cause the anticipation on market collapse. Thus, the import volume is greatly added. Also, certain positive results are available for the integration of several large steel groups in China. So, the added productive capacity hereof increases the demand for the iron ore.
For the prospect, the relevant specialist points out that the second mineral separation is crucial. The cost of high-grade iron is over RMB 220 Yuan in China's most iron ore mine. The cost thereof is almost the same as that of high-grade iron ore import. However, the imported high-grade ore has a top quality and is easy to smelt, so as to be more competitive. After 268 million tons of the iron ore was reached in 1997, the output hereof in China was declined year by year, while the total iron ore import is increased continuously. Therefore, we should beef up the R&D and lower the policy-related cost, so that the home-made iron ore could be competitive with the imported high-grade ore.
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