While China is still a major consumer of iron ore, the Asian powerhouse is no longer the main driver for growth in demand for the steelmaking commodity, according to China Hanking Holdings Ltd.

Chinese crude steel production climbed only 0.5% year over year to 808 million tonnes in 2016.

"It is probably the lowest increase rate in the last 10 years," President and CEO Pan Guocheng said June 8 at the Association of Mining and Exploration Companies Convention in Perth, Australia.

"This really implies that even though China remains the very key consumer of iron ore, it is no longer the main driver of the net increase in iron ore demand."

China's share of world crude steel production, which reached 1.63 billion tonnes in 2016, is about 49.7%.

According to Pan, Chinese demand for iron ore is expected to grow only slightly to 1.26 billion tonnes this year and a similar level in 2018, from 1.25 billion tonnes in 2016.

The country's iron ore imports, meanwhile, are forecast to climb to around 1.05 billion tonnes by 2018 from 1.02 billion tonnes in 2016.

The shortage of domestic iron ore supplies is expected to continue, with China's dependency on imports to remain above 80% for some years.

Pan said the global iron ore market will continue to be in oversupply given the flattened demand growth.

This will keep the iron ore price down between US$55 per tonne and US$65 per tonne, averaging around US$60 per tonne, for this year and in 2018, according to Pan.

The executive expects the world's six largest iron ore producers to continue to grow their output, with production of 1.24 billion tonnes forecast for this year compared to 1.18 million tonnes, or about half of the world total, in 2016.

However, Pan said output will eventually be subdued and no new iron ore will hit the market if the price remains below US$80 per tonne.