NEW YORK, NY -- (Marketwire) -- 03/09/12 -- Iron ore producers are preparing for a downturn in Chinese demand this year. Not only is the country ramping up domestic production, Chinese officials recently declared a downturn in growth this year. Chinese officials cut the country's 2012 target growth rate to 7.5 percent -- the lowest year-on-year growth projection in eight years. The Paragon Report examines the outlook for the Iron-Ore Industry and provides equity research on Rio Tinto Plc (NYSE: RIO) (LSE: RIO) (ASX: RIO) and Titan Iron Ore Corporation (OTCBB: TFER). Access to the full company reports can be found at:
Despite claims form Chinese officials that growth is slowing, Rio Tinto PLC's iron ore chief executive, Sam Walsh, said that he expects China to remain a key driver of iron ore demand growth. Walsh said China is "resilient," as it is equipped to underline its growth with fiscal and monetary changes and has increasing rates of household and corporate savings.
Iron ore prices will trend lower this year with slight fluctuations, and the import price may fall below $110 a ton as the domestic market continues to contract, Wang Xiaoqi, vice-chairman of the China Iron and Steel Association, told a trade conference.
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China has taken steps to cut its dependence on foreign owned iron ore dependence. In recent years, domestic iron ore mining capacity grew by 25 percent annually on average, China Daily reports. Domestic iron ore production increased by 283 million tons, or 27.2 percent, last year.
Wu Rongqing, chief engineer of the China Mining Association estimated that China's raw steel consumption will rise about 4 percent this year to 700 million tons. Gross pig iron ore output will reach 654 million tons, about 26 million tons more than last year. These figures indicate total demand for iron ore at 1.182 billion tons, he said.
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