China’s steel output is nearing its capacity, according to one of the country’s senior figures in its steelmaking industry.
The Australian Financial Review reports that Li Xinchuang was much less optimistic than the major mining houses about China’s future steel output, predicting this would peak at around 870 million tonnes a year.
Li is the deputy secretary general of the China Iron and Steel Association, whose interests a lower iron ore price would serve.
According to studies by Li’s Group, steel output “cannot go over 900 million tonnes,” he said.
The Australian reports that BHP and Rio Tinto are predicting that China’s steel output will hit its peak at over 1,000 million tonnes.
The average price of iron ore per tonne has been $US 102.50, compared to about $US 135 last year.
“My understanding is the price will be around $US80 for a long time because of the volume being produced,” said Li.