Last year, China imported 628 million metric tons of iron ore, the key raw material for steelmaking. The imports in the first eight months of this year reached 405 million tons, unchanged from the same period last year.
Based on Dow Jones Newswires' calculation, the average monthly imports will likely stay below 56 million tons for the remaining four months of this year.
Shan predicted domestic iron ore production will likely exceed 1.1 billion tons this year. The average monthly domestic output of the material has reached around 100 million tons, and may pick up further in the future, he said.
However, major global mining companies still feel optimistic about continued robust demand from China.
Asked by reporters during the conference about his view about China demand, Warwick Smith, managing director of sales and marketing for Rio Tinto PLC's iron ore business said, "We haven't seen any drop in our shipping schedule for the rest of this year. We are running at full capacity."
China, as the world's biggest importer of iron ore, has been fighting with the global mining giants--Vale SA, Rio Tinto Ltd and BHP Billiton Ltd for more clout on pricing the ore for many years. The global mining companies have adopted a new spot-related pricing system, which sets quarterly iron ore prices based on the average prices in the previous quarter, to replace the 40-year-old annual pricing system last year, which met strong opposition from Chinese players.
Shan said the new system, based on prices indexes, fails to represent the entire picture of the market, and can be easily manipulated.
He suggested that iron ore prices should be based on steel prices, as the raw material's price is closely linked to that of steel.
Source: Dow Jones
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