The head of mining giant Fortescue says the strength of the Chinese steel sector has beaten all expectations this year, pushing annual output towards a record 1 billion tonnes and supporting ongoing demand for Australia’s top export, iron ore.
After Fortescue lifted its Western Australian iron ore shipments by 5 per cent in the past three months, chief executive Elizabeth Gaines said China was exhibiting robust demand for the steelmaking raw material and had churned out more than 781 million tonnes of crude steel so far this year.
This marked an increase of 4.5 per cent in steel production for the first nine months of the year compared to the same time last year, and has helped drive a stunning price rally, Ms Gaines said.
With Beijing seeking to cushion the economic blow of the coronavirus crisis, China’s steel sector is facing a busier-than-usual period amid a pipeline of new construction and infrastructure projects.
“The market does sometimes underestimate the strength in Chinese crude steel production,” Ms Gaines said. “If you’d asked us in January, we might have thought growth between 2-4 per cent.”