China intends to reduce dependence on imported iron ore

China intends to reduce its dependence on imported iron ore. In 2024, domestic mining companies plan to increase production of iron ore concentrate by 5-10 million tons compared to 2023. This was stated by the China Iron and Steel Association (CISA), SteelOrbis reports.

The association notes that progress in China’s new iron ore projects will contribute to the production of 370 million tons of iron ore concentrate per year in 2025. Thus, the dependence of local steel companies on imports will decrease. In particular, in 2023, the country imported 1.179 billion tons of ore (+6.6% y/y).

In January-March 2024, China produced 72.07 million tons (+4% y/y) of iron ore concentrate and 284.09 million tons (+15.3% y/y) of iron ore. At the same time, imports of iron ore in January-April 2024 reached 411.82 million tons (+7.2% y/y).

CISA expects iron ore prices to remain low in the long term, as the global supply of raw materials will be sufficient thanks to new projects on the global market, including Rio Tinto’s Simandou project in Guinea.

As GMK Center reported earlier, in 2023, China produced 1.019 billion tons of steel, up 0.6% compared to 2022. Thus, the downward trend in the country’s steel industry has stopped after two consecutive years of declining production.

Last year, the Chinese authorities did not impose restrictions on steel production in line with their ambitions to reduce CO2 emissions, which contributed to an increase in production and revenue of local steelmakers.

China’s steel exports in 2023 increased by 36.2% y/y – to 90.3 million tons. Steel imports amounted to 7.64 million tons, down 27.6% y/y. Ore imports increased by 6.6% y/y – to 1.179 billion tons for the year.