The China General Administration of Customs reported that the country's iron ore and concentrates imports were 49.94 million tonnes in October, down 17.5% from 60.57 million tonnes in September 2011. Over the first 10 months iron ore imports still show an increase over last year rising 10.8% to 557.93 million tonnes the data showed.
Bloomberg reports the spot price for iron ore arriving at China’s Tianjin port increased to $134.40 a tonne last week from $116.90, the lowest in almost two years, on Oct. 28, according to the Steel Index.
China Daily reported this week the communist government has put together plans to source 45% of country's iron ore use from domestic sources by 2015, a big increase from last year's 32%, as the country steps up efforts to protect its steel industry from a foreign monopoly over iron ore and the dominance of the big three producers – BHP, Vale and Rio Tinto – that control nearly 70% of the 1 billion tonne annual iron ore seaborne trade.
The country is also expected to add more than 100 million tons in iron ore capacity abroad over the same time frame by encouraging its steel producers to invest in iron ore projects around the world.
MINING.com argued this week that although iron ore prices have now turned around after crashing 30% in October, the longer term the outlook is not rosy thanks in large part to the aggressive go-to-market strategy of the big three.
Thanks to their economies of scale have been flooding the market by concentrating on building market share rather than maximizing prices. This way the giants drive high-cost producers out of the business and crowd out any new players who want to enter the space. Read more about the the big three iron ore producers' expansion plans and market strategy.
The same pattern that has played itself out in the copper import market in China could well happen with iron ore. MINING.com reported last month how Chinese traders took advantage of falling copper prices to stock up on the red metal. Chinese copper imports hit a 16-month high in September as prices retreated 24% to a 14-month low during the month. Read more on how when the price is right… China stocks up on copper.