China’s steel consumption dropped this year for the first time since at least 2000 due to slower economic growth, leading to a surplus of iron ore in the country and a more than 40 percent plunge in prices of the steelmaking raw material.
But top global miners like Vale and Rio Tinto, which have invested billions of dollars to ramp up output to sell more iron ore to China, are still convinced that Chinese demand has yet to peak with an urbanization drive there expected to last at least another decade.
Apparent crude steel consumption in China, the world’s top consumer and producer of the alloy, fell 1.9 percent on year to 61.9 million tonnes in August, Wang Xiaoqi, vice chairman of the China Iron and Steel Association, told an industry conference.
“There are many reasons for this – the economy slowing and the economy undergoing restructuring. Steel consuming sectors have cut their demand,” Wang said on Thursday.