NDRC forecasts 2013 iron ore demand at 50m tons

BEIJING -- China's crude steel output this year -- estimated at 746 million tons -- will fuel demand for 50 million tons of iron ore, the country's top economic planner forecast Monday.

In an analysis report on iron ore market, the National Development and Reform Commission said a supply glut in the iron ore market has been formed as demands in China and other economies cannot digest the increasing supplies at home and abroad.

Over the years, demand from China, the world's top iron ore consumer and buyer, has powered price increases of the material and lured tremendous investments to the sector.

Domestically, China's iron ore output will increase by 20 million tons this year, and in the global market, expansion plans by the Vale, Rio Tinto and BHP Bulliton will see their combined output add 100 million tons in 2013, the report said.

Global iron ore supplies are likely to rise by about 300 million tons during the 2013-2015 period, according to the NDRC.

However, as China's strong demand for steel begin to ease after the fade-out of the massive stimulus plan during the international financial crisis, combined with slower consumptions in developed economies and limited boost from emerging markets, momentum on the demand side is giving way to supplies.

"Given the trend, an oversupply situation is inevitable," the report said.

But the report noted that the concentrated global miners can adjust supplies through project delays and output suppressions, which makes the supplies and demands more flexible.

China imported 740 million tons of the raw material in 2012, up 8.4 percent year on year.

The latest official data indicates that the country imported 56.42 million tons of iron ore last month, a 13.17-percent drop year-on-year and 9.12 million tons short of the amount imported in January.