CVRD expects “very tight” iron ore market

CVRD expects “very tight” iron ore market

Cia. Vale do Rio Doce (CVRD), the largest iron ore producer in the world, expects the iron ore market to stay tight for the next several years. At the China International Steel and Raw Materials 2005 Conference in Qingdao, China, CVRD commercial director Nelson Silva said, “Supply and demand will continue to be very, very tight” in the seaborne iron ore market. “We don’t see any idle capacity existing in the next two or three years, or even longer.” CVRD anticipates that China’s steel production will increase to 380 million metric tons in 2006, compared to 340 million metric tons produced this year, said Silva. The 380 million ton estimate will equal 32 percent of the total global output. Mr. Silva said that Chinese iron ore imports will strengthen the global demand for seaborne ore, which he expects will increase to 430 million metric tons by 2010. Rio de Janeiro-based CVRD also plans to invest $17.4 billion in new mines, ports, rail lines, and smelters by 2010 to help meet this demand.