China's Baosteel Seeks Iron Ore Resources In Australia, Brazil, Canada

Australia, Brazil, and Canada will be top targets for
Baosteel Group when the Chinese firm eventually seeks overseas iron ore
resources, a senior company executive said Wednesday.

China's second-largest steelmaker by output will also
actively seek opportunities in Africa too, Vice President Dai Zhihao told an
industry conference.

Baosteel will primarily participate in projects where lump
ores and sintering powder ores can be directly shipped out, and will select
projects that have logistics facilities, Dai said.

Sintering is a method of making solid metal by heating ore powder below its
melting point. Lump ore is large-sized pieces of solid ore.

Dai warned domestic steelmakers not to “invest
blindly,” as this may push up investment costs. He said iron ore supply
will surge in the next few years as high prices in recent years have
attracted a lot of investment.

“The turning point [in supply-demand fundamentals]
will likely come earlier than expected,” Dai said.

He warned that Chinese steel companies should be cautious
in trading iron ore swaps due to credit risk and the possibility of
manipulation of iron ore indexes.