Summary
While it is true that China has some dependence on North Korea for iron ore for the less efficient state owned mill, the reality is that overall imports of ores, mainly iron ore was over $ 18 billion measured in constant 1995 prices and exchangew rates. In current terms the value is significantly greater than this. Thus the $35 million import from North Korea is insignificant and could be made-up in less than a day by any of China's main suppliers. The chart attached shows the changing pattern of Chinese demand for ores and a forecast for future growth in demand basedon a global trade and industry model.
Analysis
China's demand for iron ores and other basic ores has grown in line with the growth of the economy. In 2006 I estate that demand will be on order of $ 18 billion dollars measured in constant 1995 prices which are quite similar to prices in 2006 (1995 was a high point for ores after which prices declined before increasing sharply with the sudden expansion in growth in Asia. There are three main sources of supply collectively providing 65% of China's total demand -- India has become a more important supplier than the more traditional suppliers such as Brazil and Australia. In 2006 the shares were as follows: Australia (14%), Brazil (23%) and India (37%).
