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China's iron ore imports may fall up to 14 per cent this year as domestic output ramps up, a mining industry group said, possibly deflating prices that have been mostly driven higher by demand from the world's top buyer.
China buys around 60 per cent of the world's seaborne iron ore, a market controlled by Australia and Brazil, because of the low quality of its domestic supply of the steelmaking raw material.
China's iron ore output is estimated at between 1.4 billion and 1.55 billion tonnes this year, equivalent to 534-591 million tonnes of a comparable grade of imported ore, Wu Rongqing, chief engineer of the China Mining Association said in a presentation to an industry conference in Beijing.
China's output reached a record high 1.33 billion tonnes in 2011, Wu said.
The higher output combined with abundant stocks of imported ore at Chinese ports should cut the country's imports in 2012 to around 590-650 million tonnes, Wu said.
Last year, China imported a record 686 million tonnes of iron ore, up 11 per cent from 2010, with nearly half sourced from Australia.
Stockpiles of imported iron ore at major Chinese ports stood at near 100 million tonnes last week.
Lower Chinese imports may weaken iron ore prices which fell nearly 19 per cent in 2011 as slower steel demand curbed China's purchases later in the year.
Iron ore with 62 per cent iron content rose1.8 per cent to $143 a tonne on Tuesday, according to Steel Index, its priciest since Feb 8.
Earlier on Wednesday, world No 2 iron ore producer Rio Tinto said tighter credit and labour shortages would thwart miners' plans to boost iron ore output, joining other majors in playing down concerns the market would soon be oversupplied.
