China, the world's largest consumer of iron ore, may slow the pace of imports this year because of record prices and as the government reins in lending and real estate expansion, an official said. Imports may rise 14 percent to 435 million metric tons this year, Zou Jian, head of the China Metallurgical Mining Enterprise Association, said at a conference in Beijing. That's slower than the 17 percent gain last year. Benchmark iron ore prices surged for a sixth year this month because of rising demand from Chinese steelmakers. China's Premier Wen Jiabao wants to rein in lending to fight inflation, sparking concerns the measures will slow the economy.
"In some regions in China, we are starting to see slight falls in spot iron ore prices, and it may be a sign that higher prices are deterring purchases,'' Zou said. "The government may introduce more measures to control investment and tighten lending'' which will hurt steel demand, he said.
Global iron ore supply could exceed demand by 10 million tons this year, Zou said. He didn't give details on the falling cash prices of iron ore sold in China today.
Zou last April forecast iron ore imports would gain 20 percent in 2007.
Steel production may rise 8.4 percent this year to 530 million tons, he said today. Prices of the alloy will fall in the second half of the year after gains in the first six months, he said.
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