Li Xinchuang, president of the China Metallurgical Industry Planning and Research Institute, lately stated that the prices of raw materials are having a great impact on the Chinese steel industry.
Mr Li said, ‘Mines under our control account for less than 10 percent of the 628 million mt of iron ore imported last year." He also pointed that, in the process of developing its steel industry, China had ignored issues such as the construction of a raw material supply system, resulting in weak control over resources control, while maritime transportation was another area of weakness.
Mr. Li said that in the past six years iron ore prices have maintained a high rate of increase, bringing great pressure to bear on the domestic steel industry. The prices of imported iron ore and coking coal have risen by nearly five times over that period, while the increases in prices of finished steel have lagged far behind such increases. Industry concentration, elimination of dated capacities and technology innovation are all internal problems we experience, but are not the key problems.
He also added that China's demand for steel products is strong and will continue for quite a long time. A great threat will be posed to the stability of Chinese industry if the raw materials supply issue is not resolved.