The price of Australia’s top export, iron ore, has plunged, but one of the nation’s largest foreign investors, Japan’s Mitsui, has given a positive outlook for its price.

Chinese steel and iron ore demand was yet to peak, said Mitsui Australia chairman and chief executive Yasushi Takahashi.

Mitsui is one of the biggest Japanese keirutsu or conglomerates in the world and is a long-term joint venture partner in Australian iron ore, coal and gas projects with the likes of BHP, Rio Tinto and others.

Its Australian subsidiary is its biggest foreign venture.

The plunge in iron ore prices from $US130 a tonne a year ago to about $US50 has been blamed variously on the majors ramping up supply and China’s demand waning.

Mr Takahashi pointed out at a Melbourne Mining Club lunch that China still trailed developed countries on economic measures such as urbanisation or per capita GDP.

The average developed country was 60 per cent urbanised or more, whereas China was still in the low 50s, he said in a positive sign for iron ore and coal.

“China still has a lot of room to urbanise and further invest in infrastructure further,” Mr Takahashi said.

“In our opinion the peak will come later.

“Why we say that is that much more development is needed in many other cities and it will stimulate further infrastructure investment, which will lead to more steel demand.”

The World Steel Association predicted earlier this week that steel demand would shrink in China in 2015 and 2016.

Mr Takahashi was also bullish about future Indian iron ore demand and the separate Australian agribusiness sector.

Source: Herald Sun