Steel wheels are slowing for iron ore producers

A slowdown in global industrial steel production could spell bad news for the share prices of BHP Billiton and Rio Tinto.

Steady fixed-asset investment in China should see China’s steel output exceed 800 million metric tonnes next year according to Li Xinchuang, vice secretary-general at the China Iron and Steel Association.

Normally it takes around 1.5 tonnes of iron ore to make one tonne of pig iron, which can then become steel. On this basis, we could estimate China would need a minimum 1,200 tonnes of iron ore to meet its steel output guidance.


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