The head of Australia's Fortescue Metals Group, the world's fourth-largest iron ore supplier, expects Chinese steel production to keep growing despite an economic slowdown as government stimulus stokes demand.
Fortescue sees a "3% to 4% increase in crude steel production in China this year," based on discussion with "customers and other key figures" there, CEO Elizabeth Gaines told Nikkei on Wednesday during a visit to Japan. China, which accounts for half the world's crude steel output, churned out a record 928 million tons last year, up 10% from 2017.
In addition to the Chinese-led Belt and Road Initiative for building ports, highways and railroads across Eurasia, "the government's focus on further infrastructure development" at home is also underpinning demand for steel, and thus for iron ore, Gaines said.
"Continued investment in infrastructure is a way to continue to stimulate the economy," she said, noting that high-speed rail projects have been announced and new airports built.