China's Ministry of Industry and Information Technology (MIIT) warned that
China's soaring demand for iron ore is causing a greater reliance on imports.
Last year, China purchased nearly 70 percent of its iron ore overseas, a 13
percent increase from 2008, and the import share of world iron ore trade has
been amount to 75 percent.
Currently, imported iron ore prices have spiked and continue to trend upward. One of the three major international iron ore suppliers, Vale of Brazil, proposed to increase ore prices 80 to 90 percent last week, saying that it has no intention of signing more long-term contracts, and it is in favor of promoting the sales of stock of iron ore.
MIIT said the risk of supporting the development of iron and steel with large amounts of iron ore is growing. At the same time, the problem of overcapacity in the iron and steel industry is becoming more and more serious. Last year, China's steel production capacity reached more than 700 million tons, while the domestic market apparent consumption of crude steel was only 565 million tons. About 30 million tons went into stock, so the actual consumption was less than 530 million tons.
Production capacity is also expanding. Last year, the fixed-investment growth rate of the steel industry remained at around 20 percent.
By People's Daily Online