China is the world's largest country of consumption and importer of iron ore. 75% of the world’s iron ore flows into China, and the country's iron ore imports have maintained a high level of over 1 billion tons for four consecutive years. The foreign trade degree of dependence (FTD) of iron ore has reached 80.4%. It was understood that China's iron ore imports rely heavily on Australia and Brazil.

Looking at the global iron ore market, an oligopoly has been formed. Brazil's Vale, Australia's Rio Tinto, BHP, and Fortescue Metals Group Ltd (FMG) are the four giants, occupying more than 50% of the global iron ore market.

Both Australia and Brazil account for about 90% of China's total iron ore imports. China's iron ore is heavily dependent on imports, and overseas supply is concentrated in the hands of a few giants, which meant that China has little power in iron ore pricing and supply security.

As a result, China is increasing the use of scrap steel, which is a substitute for iron ore, to reduce the FTD of iron ore, and increase Chinese buyers' bargaining power through the strategic restructuring.

How to secure the iron ore supply is always an important issue for China.