Domestic Mills Welcome Failure of Rio-BHP Deal

Chinese steelmakers responded calmly to the failed attempt by Rio Tinto and BHP Billiton to establish an iron ore production joint venture in Australia.

China's largest construction steel producer Shagang said the failure would make little difference to its operation. Global reserves are relatively fixed, and ore prices always depend on the supply and demand condition.

A private steel mill in Hebei said it began to purchase indigenous iron ore in large quantity months ago when the global prices were high. An importer in Tianjin noted domestic ore has become more competitive in terms of production and price.

China's imports of iron ore just accounted for 55.8 percent of its total demand in June, similar to the nadir level during the post-financial crisis period of 2008, whereas domestic output amounted to 101.55 million tons, an increase of 21.9 percent from a year earlier.