China’s reliance on imported iron ore will exceed 80% in 2015 and iron ore prices will range between US$70-$130 per metric ton, writes the China Business Journal, citing a forecast issued by the China Metallurgical Industrial Planning and Research Institute.

China’s demand for raw steel in 2015 has been pegged at 720 million tons, up 1.41% year-on-year. Meanwhile, demand for iron ore is expected to touch 1.157 billion tons, a 1.67% year-on-year increase, according to the forecast.

In terms of production, China’s crude steel output is expected to reach 834 million tons in 2015, 1.71% more than the forecast for 2014.

The institute also predicted that 77.5% of China’s iron ore demand in 2014 will depend on imports and the imports in 2015 will continue to grow, reaching 80% of the total demand given the further decline in imported iron ore prices.

Due to the sluggish global economy and changes in China’s economic structure, China’s economic development has encountered multiple difficulties this year, which are reflected in a slowdown in export growth, slumping growth in industrial production, a dwindling property market, and weaker demand for steel from various business sectors.

The institute has provided a more optimistic forecast for steel and iron demand in 2015, saying that even though demand is unlikely to pick up significantly as the country is seeking to reduce inventories and improve overcapacity, new momentum is expected to be generated to drive up demand.

“The international benchmark price for iron ore has been pegged at US$70 per ton,” said Li Xinchuang, president of the China Metallurgical Industrial Planning and Research Institute.

He expects the prices of iron ore to hover between US$70-$80 a ton and could slip to below US$60 a ton at a certain point. It cannot stay that low or dip any further because such low prices could result in losses for small- and medium-sized mines, leading to their closure.

For world’s major mining companies, the current iron ore prices continue to offer ample scope for lucrative profits, the Journal stated.