Riyadh—Agencies
The World Steel Association announced its forecast that the global iron ore market will be roughly balanced between supply and demand this year, but will move toward a growing surplus during the 2014–2017 period. It said there could be a small surplus in iron ore supply of 20 million metric tons this year, which will increase to 100 million metric tons in 2014 and show another significant increase by 2017, reaching a level for which no specific figure was provided.
This forecast is based on China maintaining its iron ore production at approximately 350 million metric tons annually, and China is expected to abolish the iron ore import licensing system it has been applying for the past ten years this year, thereby opening up the import market, which accounts for about two-thirds of global iron ore trade. This move could reduce costs for domestic steel mills by cutting the commissions charged by intermediaries on imports.
Despite signs of weak demand, China’s steel sector—the world’s largest—continued to produce more than 2 million metric tons per day in April, which is traditionally the start of the peak steel consumption season in the country. Data from the China Iron and Steel Association indicated that the daily average crude steel output reached a record high of 2.129 million metric tons from April 21 to 30.
Customs data showed that China’s iron ore imports in April were up 16.4 percent from a year earlier, The data also indicated that China exported 5.55 million metric tons of steel products in April, an increase of 5.1 percent from the previous month.