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

  • Thursday, December 7, 2017
  • Source:ferro-alloys.com

  • Keywords:Iron Ore
[Fellow][ferro-alloys.com] On one hand, since previous extension projects of Vale, Rio Tinto, BHP Billiton and FMG have been gone into operation, the estimated newly-increased supply of iron ore will reach 38 million tons in 2018.

On one hand, since previous extension projects of Vale, Rio Tinto, BHP Billiton and FMG have been gone into operation, the estimated newly-increased supply of iron ore will reach 38 million tons in 2018.

On the other hand, iron ore inventory in 42 ports in China has exceeded 100 million tons for one year. The newly-increased inventory of imported iron ore places great pressure on ports. The number of inventory is likely to exceed 160 million tons in Q4.  

Concerning downstream demand, China has implemented supply-side reform and DE-capacity policies since last year, which has resolved 100 tons capacity during past two years.

According to calculation, due to environmental production limit plan in “2+26” cities during heating season, the demand of iron ore will reduce by 46 million tons during the fourth quarter and first quarter in 2018.

Except direct demand and supply factors, steel scrap is another factor to affect iron ore demand of China’s steel companies.

Lei Pingxi, general engineer of China Metallurgical Mines Association, believes China’s policy change restrain iron ore demand of domestic steel industry. In 2018 China’s imported iron ore will keep at 1.12 billion tons, rising 3% on yearly basis, 2.5% slower than last year.

  • [Editor:Wang Linyan]

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