Facing fiercer competition and structural adjustment, China's steel industry will probably change course next year, said Huang Tianwen, president of Sinosteel Corporation, at yesterday's World Shipping (China) Summit, according to the China Securities News.

The impact from the United States' subprime credit crisis is still felt, and the Chinese government as a result may resort to further fiscal measures next year, in an effort to eliminate risks stemming from excessive liquidity, said Huang.

Meanwhile, growth in steel output and fixed asset investment slowed from 2005's rates in response to shrinking demand for steel.

Although newly proven reserves of iron mines rise year after year, illegal small mines are depleted and the yield and quality of traditional mines drop. This constrains the potential steel output capacity from improving significantly.

Australia, Brazil, and India are still the world's major iron suppliers. Bhpbilliton and RioTinto from Australia, together with Companhia Vale do Rio Doce from Brazil, control 70 percent in shipping the iron mine.

When China's iron mine import growth accounts 80 percent of the world total, raw material price fluctuations and soaring shipping cost could force China's steel industry into a precarious position, Huang noted.

(Chinadaily.com.cn November 2, 2007)