Iron ore miner Rio Tinto says China's steel production will grow only modestly until 2030 but demand will increase rapidly in other emerging markets in Southeast Asia and India.
The world's largest producer of the steelmaking ingredient forecast China's annual steel production will reach 1 billion tons by 2030, from just over 800 million tonnes at present even as the economy slows. That growth will be driven by exports of higher value added finished goods as the world's largest producer moves up the manufacturing value chain, it said.
"We expect China will move up to the higher value added export market, based on what other countries have done on multiple continents, from Germany, the US, Japan and South Korea," Andrew Harding, Rio's head of iron ore, said in an interview.
Rio's analysis, however, is at odds with its biggest rival BHP Billiton, which last month lowered its forecast for peak steel demand in the country to a range of 935 million to 985 million tons a year in the mid-2020s from 1 billlion previously.
It is also contrary to that of the China Iron and Steel Association, which said in July that steel production probably peaked last year. It fell by 1.3 per cent in the first half of this year, the first contraction in 20 years, said China's official industry body.
Emerging markets other than China will be increasingly significant for iron ore, however, with their demand expected to rise by 65 per cent over the next 15 years, Rio said. Globally, it expects a 2.5 per cent average annual growth in steel demand in the next 15 years.