SHANGHAI, Nov 1 （Reuters） - China Baoshan Iron & Steel （600019.SS: Quote）, the country's biggest listed steelmaker, expects iron ore prices to stay high next year, a company executive said.
China's massive domestic steel sector is expected to face still high costs of raw materials, including iron ore, the major steelmaking ingredient, next year, Ma Guoqiang, the company's general manager, told an online conference on Monday.
As the pricing leader for the domestic steel market, Baosteel, officially admitted for the first time that the annual long-term iron ore benchmark pricing system had been replaced by one on a quarterly basis.
The China Iron & Steel Association said last week that Chinese steel mills had started talks for next year's iron ore prices.
Ma also said iron ore supplies were growing with the market seen oversupplied in the medium- to long-term. Thus, falling ore exports from India, the third-largest supplier for Chinese steel mills, would have a limited impact.
"Iron ore prices and pricing will be decided by supply and demand, and there is no problem for iron ore reserve and supply in the long run," Ma said.
Steel demand would remain steady next year, he said. Baosteel on Friday gave a cloudy outlook for the fourth quarter, reflecting its concerns about high iron ore costs and steady steel prices.
The company's net profit for the fourth quarter could grow up to 32 percent or fall as much as 24 percent, despite it estimating this year's overall net profit would grow by 110-130 percent.
"Generally, a rising yuan currency is positive for the company as we have demand for imported iron ore," the company's vice general manager Chen Ying told the conference.
Baosteel's Shanghai-listed shares climbed 1.5 percent by midday on Monday, compared with a broader 1.9 percent rise in the Shanghai Composite Index .SSEC. （Reporting by Ruby Lian and Tom Miles, Editing by Jacqueline Wong）
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