Abstract: China’s iron ore intensity of use was analyzed for its changing characteristics in different periods since the adoption of reform and opening-up policy. An increments decomposition model was developed for the iron ore intensity of use. The increments in iron ore intensity of use in different periods were decomposed and analyzed using the value added and total output data from China’s input-output tables. The results showed that before 2002， the growth rate of capital formation was either lower than or almost equal to that of GDP， and the ISSRI’s iron ore consumption factor decreased to drive down the iron ore intensity of use. From 2002 to 2010， the growth rate of capital formation was higher than that of GDP， and the ISSRI’s output efficiency went down while its iron ore consumption factor went up significantly， resulting in a sharp rise of the iron ore consumption intensity. Accordingly， the main problem to be solved for ISSRI is to eliminate surplus capacity of low-value products and upgrade its product structure so that the iron ore intensity of use in the economic system can be lowered， achieving the goal of sustainable and healthy industrial development.

Key words: iron ore intensity of use, iron and steel smelting and rolling industry (ISSRI), decomposition model, capital formation, consumption factor