Brazil miner and iron ore producer Vale said this week the peak of steel consumption in China has yet to be reached.
“China’s steel consumption peak still has a way to go, but of course the growth will be much more gradual,” said Claudio Alves, the company’s global marketing and sales director for ferrous, at an industry event in Qingdao.
Vale’s comments oppose the idea that steel consumption in China was already reached. The Australia New Zealand Banking Group said recently that such a peak was reached in 2014, while Credit Suisse expects Chinese consumption of the product to fall 10 percent by 2018.
Despite the slowdown seen in the growth of Asia’s largest economy, China still remains as the world’s economic engine, Alves said, adding urbanization and infrastructure projects will boost demand for iron ore, steel and other base metals.
Looking to expand Vale’s market share in the global iron ore market and still believing in the potential ahead for steel consumption in China, Alves also said the company expects to cut iron ore production costs to about $13/mt by 2018.
"Vale is advancing to reach the lowest cash cost of the industry and will be competitive at any price scenario,” Alves said, while commenting the target cost the company has for its S11 project. A media report said Vale's overall production cost reached $15.80/mt in Q2.