OREANDA-NEWS.  December 16, 2011. As China’s economic growth is slowing steadily, domestic steel mills have scaled back their operations, which has in turn driven iron ore prices down. Resources giant Rio Tinto has found that its customers are getting more wary of their procurement activities due to global economic uncertainty.

Chinaбпs stockpiles of iron ore at main ports have exceeded 100 million tons, or equivalent to two month of consumption. The prices of imported iron ore are expected by an expert to stay at \\$140-150 a ton next year, a reduction of 7-10 percent from this year’s level.

The steelmakers that were using their full facility utilization have suffered from big losses as domestic steel prices unexpectedly tumbled by over 500 yuan a ton in what would have been the traditionally strong season of September and October.

Valin Steelбпs P/B ratio has slipped to 0.63 time, the lowest among all the enterprises listed on the Shenzhen and Shanghai Stock Exchanges. The share price of industry leader Baoshan Iron and Steel is less than 5 yuan per share.

Yet Rio and BHP Billiton have been ramping up mining activity as schedule, since they still hold faith in Chinaбпs growth potential thanks to the government intention to expand the urbanization rate to 50 percent by 2015.