It is said from Li Shijun (vice secretary general of CISA) that motivation for the steel production in China mainly comes from domestic development when demand on the international market is declining, said .

The development is sustainable even after the Chinese government’s huge economic stimulus plan comes to an end. The government’s economic stimulus plan, especially the large-scale investment in infrastructure construction, has boosted China’s steel industry to recover ahead of other countries.

China’s 80,000-kilometer railway network saw the construction of another 30,000 new kilometers underway this year. Some 2.39 million tons of rail tracks have been produced in the first half of this year, up 105 percent over a year ago.

However, Li noted it is unnecessary to worry about the China’s steel industry would lose development momentum after the government’s stimulus plan comes to end.

The automotive industry, an important steel consumer, has witnessed a considerable sales this year with the government’s stimulus plan, and it still has plenty of room for development in China even without the stimulus plan, Li added.

At present, China owns only 37 units of automobiles for every 1,000 people on average, while the world’s figure has already reached 140 units.

Meanwhile, the country’s urbanization will also support steel industry development, though Li warned not to over-estimate the effect of this.

It is said from Shan Shanghua (general secretary of China Iron & Steel Association) that CISA will strictly adopt a unified price and the agency system for imported iron ores next year.

CISA is reported to have removed about 10 enterprises off the list of companies with iron ore import qualification, while the association always added some new members to list in the past years. “It shows how determined CISA is in regulating the market.” Said an official with CISA.

A senior official of Shandong Iron & Steel told 21st Century Business Herald that CISA is actually preparing for the 2010 international iron ore negotiations now.

“Although CISA declares that negotiations for the 2009 prices are still going on, there won’t be any new results. We have begun preparing for the 2010 negotiations, but haven’t stated any real talk with the three iron ore suppliers.”

The senior official said.The three iron ore suppliers are Vale, BHP Billiton and Rio Tinto.At mid September, Tom Schutte, chief of BHP’s Sales Department, said that the talk for iron ore price in 2010 would start this October.

Although iron ore price talk is declared to start in October each year, the routine is that the real negotiation only begins in next year’s January, and both sides use the strategy of “playing for time” to add to its bargaining chip.Investment banks like Goldman Sacks, Merrill Lynch, UBS and JP Morgan, expect the iron ore price of long-term contracts may rise between 10 to 20 percent in 2010.However, Zeng Jiesheng, analyst with China’s information provider MySteel.com, says the investment banks may be exaggerating and the final price will largely rely on the market demand and supply.

According to MySteel.com statistics, Iron ore stock at major Chinese ports reached 73.32 million tons by 18 September. Currently, Chinese steel plants and traders are stocking iron ores on a dim outlook towards the 2010 international talk.