Chinas iron ore demand to go up by 7% in 3 years

Sep 25 | Updated: Sep 27 2007, 06:26am hrs
Demand for iron ore will rise by as much as 55 million metric tonne, or up to 7%, in each of the next three to four years as Chinese steel output grows, a Goldman Sachs analyst said on Wednesday.

The increase will help drive a 30% price increase next year, Paul Gray, a London-based commodities analyst with Goldman Sachs JBWere Pty, said at a Brazilian Mining Association conference in Belo Horizonte. The price will hold steady in 2009 and see a small drop in 2010, Gray said.

Chinese imports of iron-ore, the main ingredient in steel, will rise to 565 million metric tonne in 2010 from 386 million now, Gray said. China, the worlds largest steelmaker, is expected to buy 57% of the worlds seaborne iron-ore exports in 2010, compared with about 50% now, he said.

The seaborne iron-ore trade will remain undersupplied for several years, Gray said.

When it balances out in 2010, oversupply will be nominal, he added.