BEIJING Jan 21 China diversified its spot
iron ore buying away from India in 2011, largely in favour of
South Africa, but failed to reduce its dependence on term
purchases from top suppliers Australia and Brazil, customs data
showed on Saturday.
Chinese planners have said for several years that iron ore
supplies from India and elsewhere could help break the dominance
of the world's top three iron ore miners, BHP Billiton
and Rio Tinto of Australia and
But in 2011, China imported 64 percent of its iron ore from
those two countries, unchanged from the year before. Meanwhile,
iron ore purchases from India dropped by 24 percent, amid
complaints about declining quality.
Purchases from South Africa rose 22 percent, helping to
offset some of the missing Indian tonnage. India still remains
No. 3, supplying twice what China gets from South Africa.
Overall iron ore purchases rose by 10.94 percent, as the
Chinese steel industry continued to expand output in the face of
slowing domestic economic growth.
China's diversification strategy has led it to seek iron ore
from as far afield as Mauritania and Myanmar. That represents a
"massive change" in the market, according to remarks on Monday
by Wang Xiaoqi, vice-chairman of the China Iron and Steel
Association, which represents China's largest mills.
This year, the top suppliers could become even more
important to China if softer prices no longer allow marginal
producers to cover their higher production costs.
"As long as Chinese demand for iron ore is high, we're going
to see more countries selling iron ore into China. But 2012
could be very different because we're expecting a slowdown in
iron ore consumption growth," said Henry Liu, head of commodity
research at Mirae Asset Securities in Hong Kong.
"In that case, these marginal producers will reduce their
exports to China and the dominant players will get more market
A total of 64 countries supplied iron ore to China in 2011,
up from 44 in 2010.
The increase in non-traditional sources reflects tight
supplies, strong demand and high prices, rather than an explicit
strategy to ease dependence on Australia and Brazil, analysts
Shipments from many of the debutants -- including Albania,
Armenia, the United Kingdom, Cambodia and Denmark -- remained a
negligible fraction of China's total import volume over the
Imports from the second tier of suppliers -- consisting of
South Africa, Russia, Canada, Iran, Ukraine and Indonesia --
reached a total of 104.85 million tonnes, accounting for 15
percent of the total, up from 12 percent in 2010.
Iron ore prices are seen averaging $150 per
tonne in 2012, a mid-December Reuters poll showed, versus $168