Domestic iron ore or entry into the buyer's market said short-term hard to change

On March 14, "Daily Economic News" learned that in the case of a rebound in the steel market prices, steel mills have been cautious in purchasing raw material resources such as iron ore, and the current import turnover of iron ore market is more than expected from previous years. The supply and demand sides remained in a stalemate, and the port inventory rebounded after a continuous decrease. In this regard, Wang Guoqing, deputy director of the Lange Steel Network Information Research Center, said that the current import of iron ore is still in the supply of more than necessary, and the steel plant demand will not be a greater release in the short term, is expected to import for some time in the future The iron ore price will remain in the consolidation phase. In the short term, the domestic iron ore market is still in the buyer's market.

Import mine stocks are now growing domestic mining market into a wait-and-see atmosphere

Since the fourth quarter of last year, the output growth of the Chinese steel industry has declined. In 2012, the steel “winter” was far from showing signs of abating, and most of the steel mills were in losses. The steel mills gradually reduced production from the fourth quarter of last year. The continuous expansion of the loss in the steel industry has also directly led to the decline in iron ore prices.

Lange Steel Network data show that from the port inventory statistics, after a slight decrease in 5 consecutive weeks, as of March 9th, the domestic port of imported ore inventory was 101.11 million tons, an increase of 1.18 million tons. In addition, China Steel Association data show that from March 5 to March 9, the average price of domestic iron ore was 997.16 yuan / ton, an increase of 1.08 yuan per ton; imported iron ore average landed price of 140.73 US dollars / t, the chain fell by US$2.60 per ton, and the tax-inclusive price was RMB1038.52 per ton, a decrease of RMB17.66 per ton. At the same time, China Steel Association data also showed that as of the end of February, the country’s crude steel output remained below 1.7 million tons for four consecutive months. After a slight decline in the price of imported ore, it did not drive the increase in market volume. “According to the current market transactions and statistical data, they all reflect the low demand for imported ore mines and are still in a situation where supply is greater than necessary, and steel plant demand will not be released in the short term. The import ore market is in a consolidation phase, and the market has significantly increased its resistance, said Wang Guoqing, deputy director of the Lange Steel Network Information Research Center.

Domestic iron ore market highlights buyer's market phenomenon

“In the past few years, with the rapid development of the Chinese steel industry, iron ore has become an important strategic resource. However, starting from this year, iron ore is basically in balance between supply and demand, and prices are also developing in the direction of a downward path. Zhu Jimin, the representative of the National People's Government and chairman of Shougang Corporation, pointed out at the interval. He said that at home and abroad, the pace of mine construction has also begun to accelerate. This year, the relationship between supply and demand has changed significantly. In the coming years, there will be a lot of slowing down of supply.

Steel mills are also in a prudent state in purchasing raw material resources such as iron ore. Wang Guoqing pointed out: "At present, the domestic iron ore market is quite prominent in the buyer's market." He believes that the reason is that the control cost of the entire steel industry is still one of the more important tasks. Secondly, as compared with mineral selection companies, steel mills are more flexible in the selection of domestic ore and imported ore resources, and have more advantages in multi-channel procurement.

Wang Guoqing believes that “the advantages of late-stage steel companies as the dominant players in the iron ore market have further expanded.” First, the game between domestic mines and imported mines may ultimately benefit steel mills, and the price of imported ore is relatively low. Under the circumstances, there is an increase in the number of steel mills whose trends show an increase in the ratio of outside mines. Second, the high inventory of the imported ore market and the slow recovery of the international financial environment have provided favorable conditions for the low operation of imported ore. Taken together, the domestic iron ore market is dominated by buyers’ dominant position in the short term, and the overall market consolidation dominates.

As a representative of China’s large steel mills, Zhu Jimin also pointed out the problems existing in the current domestic ore. Zhu Jimin believes that in the past few years, iron ore resources in the international market were in short supply and prices remained high, mainly because China's development speed was too fast and the demand was too high. However, this was only a phased shortage. At that time, China's mine construction did not keep pace with the development of the country's steel industry. China's iron ore resources are abundant. Although these resources are mostly poor mines, with the advancement of technology and the increase in ore prices, our domestic capacity for ore exploration and exploitation is increasing at a rate of 20% every year. This gradually Increased our proportion of meeting our own needs.

“At present, China’s enterprises’ ability to purchase minerals for international minerals is still relatively weak. The number of trade mines is too large, and the factors of speculation are too large, which intangibly drives up the price of this ore. This has brought us not to see Some of the problems.” In response, Zhu Jimin suggested that the government must organize domestic enterprises and orderly participate in the international iron ore procurement in order to stabilize prices and avoid the “China demand” impact on the global iron ore market.