China in struggle of securing raw material supply

China in struggle of securing raw material supply

World's largest steel producer China is reportedly looking for ways to secure its raw material supply. Accordingly, Chinese producers are trying to conclude deals with foreign suppliers to secure stable supply of scarcely found raw materials, such as iron ore and nickel, which are used in making carbon steel and stainless steel respectively. Again with the same aim, certain Chinese producers are establishing new mills in countries like Brazil where they will be able to supply raw materials for their mills, the products of which will be shipped back to China. Moreover, China is conducting feasibility studies on certain mines overseas. On the other hand, China wants to expand its steel business in Australia and South America. As previously reported by SteelOrbis, in Australia, four Chinese mills, namely Wuhan Iron and Steel Corp, Maanshan Iron and Steel Company Ltd, Jiangsu Shagang Group Co Ltd and Tangshan Iron and Steel Co Ltd have already reached an agreement with BHP Billiton to provide 12 million tons of ore annually for the next 25 years for $9 billion.