Sinosteel to up ore buy

Sinosteel Corp, China's second-biggest iron-ore trading company, will increase imports of the commodity from India by more than a fifth this year as rising demand threatens to push up global prices for a sixth year.

Purchases may reach 10 million tonnes from 8.13 million tonnes last year, Wang Tiezheng, deputy general manager of Sinosteel Trading Co, a group company, said in an interview on Wednesday.

China is seeking to diversify supply from Australia and Brazil, and benefit from lower shipping rates from neighbouring India, because iron-ore prices have tripled in the past five years. A tax imposed by the South Asian country on exports of iron ore hasn't reduced the appeal of Indian ore.

"The recent surges in iron ore prices have made the Indian levy quite irrelevant," said Wang.

India is the second-biggest supplier to China, providing a quarter of total imports. The government in May imposed a tax on exports of iron ore linked to the grade of the mineral to ensure supplies are enough to meet demand from domestic steelmakers.

China's local iron ore prices reached 1,000 yuan ($132) a tonne this week from about 600 yuan in the year-earlier period, according to Beijing Antaike Information Development Co.

The country, producer of one-third of the world's steel, may boost output of the metal by 14 per cent to 480 million tonnes this year, the China Iron and Steel Association said July 30.

China may boost ore imports by 18 per cent to 386 million tonnes this year, Zou Jian, the head of the China Metallurgical Mining Enterprise Association, said on Thursday. India has the world's fifth-biggest reserves of iron ore.