Steel consumption expected to jump nearly 15% despite shutdowns, says chief executive Petros Pappas.
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"We think that it's not going to affect the total trades ... because we see that steel makers still make healthy margins ... and steel consumption in China is increasing by 14.8% this year," he said today during a conference call on third-quarter results. "We think that that is going to continue this year going forward."
He said steel mills may slightly lower iron-ore imports during next year's first quarter in response to the shutdowns to stock pile iron ore for steel production after the second quarter.
The factories would not stop importing in the first quarter, however, and then abruptly increase orders for iron ore in the second quarter because that would cause the commodity's price to jump, he said.
"Our opinion is that it will happen to a degree but not substantially because if they stop importing right now ... and start in Q2, they will just shoot themselves in the foot," he said, responding to a question.
Pappas said he expects a better demand in the second quarter, however, as a slowdown is expected in the next few months.