China's March iron ore output falls 13.4 per cent, imports rise

China's iron ore output dropped 13.4 per cent year on year to 105.1 million tonnes last month, government data showed yesterday, as increased low-cost imports and slower economic growth in the world's top consumer hurt demand for local ore.

More closures of mainland iron ore mines are expected to increase imports further, as well as ease a supply glut that has pulled spot prices down by more than half to US$50 a tonne in the past 12 months.

Top miners Vale, Rio Tinto and BHP Billiton have boosted output, focusing on slashing costs to thrive from falling prices by squeezing out high-cost miners and gaining market share.

Output fell 9.3 per cent to 281.2 million tonnes for the first quarter from a year ago, the National Bureau of Statistics data showed.

Massive losses due to low prices have reduced utilisation rates at small mines to as low as 20 per cent and prompted the government to cut taxes by half to 40 per cent of the base rate from May 1 to lower production costs.

Work suspensions have widened to Australia, where two small companies have shut mines in the past week.