Cost of imported iron ore declines more than 30% in 2009

Reporters learned from China Iron and Steel Association (CISA)'s first information release conference of 2010, that the average cost of producing pig iron for steelmaking in 2009 for China's mid-sized and large iron and steel companies declined 28.46 percent from that in 2008, which helped the entire industry turn loss into profit. The average cost of purchasing imported iron ore decreased 34.19 percent year-on-year, which is one of the important reasons for the reduced production costs for steel and iron companies.

Only Chinese steel companies increased output in 2009, contrasting sharply to their counterparts in Japan, South Korea, Europe and U.S. that generally reduced output. In order to reduce inventory, the world's 3 largest suppliers of iron ore briefly slashed iron ore prices, and peddled iron ore among China's mid-sized and small steel plants. This resulted in the spot price being lower than the contract price, and the rare situation of the iron ore price in China being lower than that in the international market occurred.

CISA believes the price of the imported iron ore will likely increase in 2010, which will in turn push up the prices of China-made iron ore. This will make steel prices go up amid fluctuations in China.

By People's Daily Online