Chinese officials said Wednesday that there will be a more balanced supply and demand situation in the international iron ore market in 2007, and this will influence ongoing price negotiations.

The market will be less tense next year as the country's iron production growth slows, reducing the need for iron ore, while domestic and foreign iron ore supplies rise, said Wang Shouwen, director of the foreign trade department of the Ministry of Commerce.

China's domestic iron ore output rose sharply in 2006, easing the tight market situation. Official figures show large-scale Chinese mines produced 521 million tons in the first eleven months, an increase of 38.2 percent on the same period last year.

China's iron ore imports, which had rocketed in recent years, have been reined in and are now growing steadily, and this has affected the international market, said Luo Bingsheng, vice chairman of the China Iron and Steel Association (CISA) at an industry forum held on Wednesday.

He predicted China will import around 325 million tons of iron ore next year, a rise of 18.2 percent year-on-year, much lower than the 30 percent growth since 2003.

Chen Haoran, chairman of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters said market forces should play a decisive role in the ongoing negotiation.

He said the current mechanism should be adjusted so that a more reasonable price fixing system can be set up that is beneficial to all parties.

Source: Xinhua