Bloomberg reported that China's iron ore imports may fail to increase next year for the first time since at least 1999 because of slowing demand from steel mills.

Mr Zou Jian chairman of the China Metallurgical Mining Enterprise Association said in an interview lately in Beijing that imports may remain at 400 million tonnes next year, unchanged from 2008 levels. The demand slump will show up in import figures in the next two months.

Analysts said China this week announced a CNY 4 trillion stimulus plan to revive growth in the world's fourth largest economy, investing in housing, railways, roads and airports. Contract iron ore prices may drop next year, the first in seven, hurting profits at Cia Vale do Rio Doce, Rio Tinto Group and BHP Billiton Ltd.

Ms Helen Lau a Shanghai-based analyst from Daiwa Securities Group Inc said “Iron ore consumption will keep slowing to at least the first quarter, or even longer. She said the stimulus plan may boost China's iron ore imports to between 400 million and 450 million tonnes.”

According to China's Customs General Administration, Brazil's Vale and Rio Tinto, the world's two largest iron ore suppliers, have announced production cuts because of reduced demand from China. Imports dropped 22% in October to 30.6 million tonnes from the previous month.

Mr Zou said domestic iron ore mines that started in the past five years are losing money, and some have closed. More may shutter as prices of the raw material continue to fall. He said that although this week's stimulus plan is positive and it will be difficult to gauge how the market will be bolstered.

According to Beijing Antaike Information Development a research firm cash prices of iron ore imported by China have tumbled 62% since May 9. Contract iron ore prices charged by Vale, Rio and BHP may fall 40% next year.