China's demand for imported iron ore may have reached its peak, but the types of imports are expected to change as the country aims to reduce carbon emissions, Reuters reported on Thursday. China, the largest steel producer in the world, purchased a record high of 1.18 billion metric tons of iron ore in 2023, accounting for about 75 per cent of global seaborne iron ore trade. However, imports have remained relatively stable between 1.07 billion and the 2023 peak since 2019. The projected plateau in steel production is due to two main factors: China's informal cap on annual steel production at one billion tons and stable domestic iron ore production, with any volume increases balanced by declining ore quality. With China's demand potentially stabilising, the focus now shifts to evolving market dynamics. Iron ore prices have been primarily influenced by China's growth over the past two decades, with imports increasing sixfold from 2004 to 2024. Although China will remain a major buyer of seaborne iron ore, its dominance is projected to decrease slightly. This opens up opportunities for other Asian steel producers, such as India and Southeast Asian countries, to become significant players. India, currently the fifth-largest iron ore exporter, is likely to prioritise its domestic steel industry's growth, potentially reducing exports and becoming a net importer in the next decade. Vietnam and Thailand are also expected to boost steel production, relying on imported iron ore.
