China steel mills halve production forecasts

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The Chinese steel mills driving Australia’s mining boom have cut their production rates in half for the next year, as the country’s growth slows from previous highs.

According to Fairfax Media the China Iron and Steel Association has cut its growth estimate from 8 per cent last year to 4 per cent.

The move comes as Moody’s advises investors it expects China’s steel demand to slow to 5.7 per cent, down from the 11 per cent high over the past three years.

The slide will impact the operations of Australia’s iron ore producers, including BHP Billiton, Rio Tinto, and Fortescue Metals Group, who rely on demand from China to fuel their expansions.

It will also dampen Australia’s coking coal industry.

Despite the slow down Rio Tinto has repeatedly assured investors it is confident growth in China will support the mining industry in the future.

Earlier this month Rio Tinto Australia CEO Sam Walsh said iron ore demand was "forecast to grow strongly".

China is the world’s largest iron ore consumer and accounted for 60 per cent of global trade in the commodity last year.

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