BHP Billiton's chief executive Marius Kloppers predicts growth in the global iron ore market will slow to 650 million tonnes this decade, down from 800 million tonnes in the last decade.
The head of the world's biggest miner says while China's steel consumption has now peaked, demand for commodities will still grow as the world's most populated country moves from an investment-led economy to a consumption-led economy.
Mr Kloppers said China's growth in the past decade had relied on the creation of new cities, buildings, roads, housing and other infrastructure to support its massive urbanisation trend.
"As these cities and buildings are completed and as people continue moving to the cities, their future needs will include the next level of consumer goods being kitchen appliances, heating and air-conditioning, cars, and so on," he told the Brisbane Mining Club today.
"While all this occurs, steel intensity per unit of GDP will continue to moderate, and growth rates for iron ore and coal are likely to decrease."
However, he said the market would still offer substantial opportunities for companies and countries that could supply competitively and at low cost.
BHP believes Chinese demand for commodities such as copper, energy, aluminium would increase, while better dietary habits would lead to higher demand for commodities such as potash.
It expects China's GDP growth to be about seven to eight per cent this year and to sit around that level for the next 10 years.
The surge in steel intensity per unit of GDP had "now peaked" and would progressively decline while per capita consumption of steel would continue to grow at a slower rate, he said.Mr Kloppers noted that BHP had 20 projects underway with a combined budget of $23 billion, including a large oil and gas business.
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