Analysts and the world’s biggest miners are increasingly at odds over the outlook forsteel in China, the world’s biggest producer.

Investment bank UBS cut its forecast for the annual compound growth rate of steel production in China over the next five years to 0 per cent from 1.4 per cent, saying the country is at a crossroads in its development.

The world’s largest miners, BHP Billiton and Rio Tinto, however, expect China’s steel production, which reached 820m tonnes last year, to keep rising until the next decade before it begins to plateau. BHP and Rio are two of the world’s biggest producers of iron ore, a key ingredient in steelmaking.

“Iron ore mining companies still forecast China’s output to grow at 2.5 per cent compound annual growth rate until 2025, but we disagree,” UBS said in its report. “Our analysis shows that its steel production has already reached a turning point.”

The country’s construction activity is falling and the impact of any local stimulus is likely to be offset by existing overcapacity, it said.

Andrew Harding, the head of Rio’s iron ore business, told a conference in Australia on Tuesday that growth of just over 1 per cent a year is required for China to reach 1bn tonnes of crude steel production around 2030.

“While urbanisation will remain a key driver, future Chinese steel demand will increase on the back of rising incomes, resulting in greater requirements of vehicles and transport infrastructure,” Mr Harding said. “Ongoing manufacturing competitiveness will also contribute as Chinese exports of machinery and white goods, for example, continue to rise, particularly as the developed economies recover.”

At the same conference, BHP’s president of iron ore, Jimmy Wilson, said China’s crude steel production would peak at 1bn to 1.1bn tonnes in the mid-2020s and plateau in 2030.

China’s steel industry accounts for around 70 per cent of seaborne iron ore demand. Concerns about weakening demand and rising supply has pushed the commodity down 17.8 per cent this year after declining from $134 to $71.20 in 2014. Last week it sunk below $60 a tonne for the first time since 2009.

BHP and Rio, however, continue to defend their strategy of tipping more ore into an oversupplied market.

In his presentation, Mr Harding said Rio expected around 100m tonnes of fresh supply of iron ore to come on line this year, which would be largely offset by 85m tonnes of production leaving the market.

“This will again come from Chinese and seaborne suppliers, however there may also be exits from traditional seaborne supply regions going forward as some miners place their marginal operations on care and maintenance,” he said, adding there was a further 80m tonnes of supply at risk because of low prices.

However, many analysts reckon these forecasts are also over-optimistic and say a much larger surplus will emerge if Chinese demand does not pick up.