[SYDNEY] Rio Tinto said on Thursday it expects to see strong growth in iron ore demand in countries outside of China as the global seaborne market expands.
China has long been the top market for sea-traded iron ore, importing close to 1 billion tonnes a year, out of a global market of 1.4 billion tonnes. Rio Tinto accounts for about a third of China's imports. "We project that the world will demand around 3 billion tonnes of iron ore by 2030, a 2 per cent average annual increase from today's levels," Rio Tinto's iron ore head Andrew Harding said. "We are expecting non-Chinese demand for steel to increase by 65 per cent in the period to 2030, with Asean (Association of Southeast Asian Nations) economies and India playing key roles," Mr Harding said in a speech to business leaders in Perth.
Half of the expansion in global iron ore demand will be supplied through the seaborne market, according to Harding, where Australia and Brazil are the dominant suppliers.
Still, Chinese demand for ore will be "critically important," with steel production expected to grow 1 per cent a year from a very high base, he said.
Mr Harding's comments run counter to forecasts by the China Iron & Steel Association (CISA), which sees China's crude steel output declining to 780 million tonnes by 2020 from 823 million tonnes in 2014, as steelmakers grapple with slower demand growth and tumbling prices.
CISA on Wednesday said it expected China's crude steel production to fall this year and next, with a brief rebound in 2017 before resuming the downward trend.
China's steel sector is already struggling with 300 million tonnes of surplus capacity, pushing iron ore prices to their lowest since July, while inventories at Chinese ports have ballooned to the highest since May.