According to the China Iron and Steel Association (CISA), iron ore pricing negotiations for 2011 between Chinese steelmakers and the ‘big three' iron ore giants, i.e., Vale, BHP Billiton and Rio Tinto) have commenced.
Speaking on October 29, CISA vice chairman Luo Bingsheng said that in the January-September period this year China imported 457.6 million mt of iron ore from overseas markets, down 11.53 million mt or 2.51 percent year on year. In Q1 2010 the Chinese iron ore import volume increased 18.4 percent year on year, in Q2 it decreased 6.87 percent year on year, and in Q3 it decreased 14.33 percent year on year. In 2009, China imported 638 million mt of iron ore. For 2010, however, China's total iron ore import volume is expected to be lower than the 2009 volume, Mr. Luo said.
The CISA official added that in January-September this year China's pig iron output was up 10 percent year on year. In the same period, China's iron ore output was 780 million mt, up 25.89 percent year on year. He stated that domestic iron ore output had increased massively, with domestic iron ore replacing imported iron ore to a certain extent.
Mr. Luo also said that in Q4 Chinese iron ore demand is expected to increase. At first, some steelmills will increase inventory for winter and spring production, and so iron ore demand will increase. Secondly, the three iron ore giants lowered their Q4 iron ore quotations, and so Chinese steelmakers are expected to import some iron ore to replenish their stocks. In Q4, the total import iron ore volume will increase, but the total import amount for 2010 will not be higher than in 2009, he stated.