An Analysis Of Utilization Strategy Of Overseas Iron Ore Resources For China

Steel industry, as an important basic industry of China, is also a pillar industry in national economy. China has been the center of steel production and consumption currently after dramatically development since 1990s. Total production of world crude steel amounted to 1.24 billion tons in 2006, in which China produced 418 millions tons, accounting for over one third of the world total production.Supply of the steel scraps resource in China is inadequate, which leads to the ratio of iron to steel to be over 90% in China. Iron ore is the main raw material of steel producing while the iron ore reserve in China is not optimistic. Consequently, it is a basic strategy to make full use of both domestic and foreign iron ore resources for the rapid development of Chinese steel industry.Various factors influencing demand of steel products in China were analyzed and key factors were discovered in this paper, an econometric model was derived which well explains the consumption variation of steel products during the past 20 years. Reasonable forecast of steel consumption before 2020 was put forward in the paper. With full consideration of development strategy of Chinese steel industry, consumption of pig iron, import and export volume of pig iron, steel billets(ingot) and steel scraps, steel-making dust and other influence factors, iron ore demand was forecasted in this paper, which shows the importance and urgency of full utilization of iron ore resources both in China and abroad.Availability of long term, stable supply of good quality and low cost iron ore resources is key problem to Chinese steel producers. It is international routine to purchase iron ore with combination of long term and short term contracts. The purpose of international investment, with iron ore mining in foreign countries as main approach, is to guarantee the stable supply of iron ore by occupying foreign iron ore resources meanwhile to lower the cost of import,.