Despite last month's government pronouncement that it would embark on a massive infrastructure plan to spur up economic stability and growth, Chinese consumers of iron ore still have to actually bite into the good news as stockpiles of the key steelmaking ingredient jumped week on week in at least 25 major Chinese ports.
In a move that caught Australian iron ore miner Western Desert Resources (WDR) off guard, its lone suitor Chinese company Meijin Energy Group has withdrawn its $435 million takeover bid into the Northern Territory-based company.
During the week ending on October 8, the 25 major Chinese ports' inventories of imported iron ore were at 101.64 million metric tons, up by 360,000 metric tons week on week, Xinhua's latest iron ore price report released on Tuesday revealed.
China's steel companies are still on a watch mode if the government's infrastructure pronouncement will fly off the hook, thus still reluctant to purchase new raw materials that cause the burgeoning iron ore stockpiles at the ports.
But Xinhua analysts believed steel makers will eventually pick up as prices of steel as well as cement are expected to rebound in the short-term. Prices of imported iron ore are likewise expected to jump in the short-term.
Meanwhile, Wood Mackenzie Ltd. believed China's appetite on imported iron ore will surge by as much as 80 per cent versus actual consumption by 2015.
Paul Gray, Wood Mackenzie's principal iron-ore market analyst, said in the 7th EU Iron Ore Conference in Vienna on Monday that based on estimates, China's "medium-term" imports of iron ore will reach 50 million metric tonnes next year, and by 2015, the world's biggest steel producer and importer of the key commodity will be consuming more than 1.2 billion tonnes a year.
"The early ventures overseas by Chinese entities have been the most successful, the more recent ones have been rather more dubious and some have been outright failures," Mr Gray said.
"If everything China invested in were to proceed, China could account for a third of its iron-ore requirements from captive overseas investment. We think that's highly improbable," he added.
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