Iron ore dependence on foreign countries dropped to 60%

In 2011, China's dependence on foreign iron ore decreased from 70% two years ago to 60%, and this 10% decline is extremely difficult for the Chinese steel industry. When the survival of the steel industry is extremely difficult, it gradually gets rid of three. The control of big mines is particularly important.

Breaking the monopoly effect In the past few years, the three major mining giants have relied on their own monopoly status and continuously raised prices, which made Chinese steel companies miserable and forced them to reduce their dependence on foreign countries. At the “2012 China Iron Ore Conference” held yesterday, Wang Xiaoqi, vice president of the China Iron and Steel Association, said that since 2010, China’s dependence on imported iron ore began to decline. In 2011, China’s import of iron ore Dependency is less than 60%. Two years ago, in 2009, China’s dependence on imported iron ore was as high as nearly 70%.

Data show that in 2011, 77 large and medium-sized iron and steel enterprises realized a profit of approximately 87.5 billion yuan, down 4.51% year-on-year. Among them, the sales profit ratio of key large and medium-sized steel enterprises was only 2.4%, and the loss-making enterprises were expanded to 8 with a total loss of about 3.28 billion yuan. The China Steel Association has repeatedly stressed that "high imported ore prices are a major cause for the profitability of dried-out steel companies."

However, not long ago, foreign media reported that China’s foreign dependence on iron ore in 2011 has not changed compared to 2010, and this also questioned the poor effect of diversified ore procurement strategies adopted by Chinese steel companies. This time, the latest statement of China Steel Association was also considered by the industry as a counterattack against the above news.

In-house procurement and overseas investment in parallel Wang Xiaoqi believes that the rapid development of domestic mines and the mass production of overseas interests and minerals are the main reasons for reducing China's dependence on foreign iron ore. According to incomplete statistics of China Iron and Steel Association, at the end of 2010, the capacity of Chinese enterprises for foreign equity mines has reached 150 million tons per year. In 2011, 30 million tons of new ore mines will be added, which will take into consideration the construction period of 2-3 years and accelerate the construction of mines since 2008. Will gradually develop its capabilities. In the future, the foreign dependence of iron ore in China will be further reduced.

At the same time, domestic iron ore production increased from 420 million tons in 2005 to 1.33 billion tons in 2011, an average annual increase of 21%. In 2011, domestic iron ore production increased by 283 million tons, a year-on-year increase of 27.15%, which could at least meet the needs of 65 million tons of pig iron production.

According to analysis by industry experts, since 2011, domestic large-scale iron and steel enterprises have begun mass production of overseas-invested equity mines, and an inflection point of high dependence on iron ore imports has emerged. However, “My Steel” analyst Zeng Shengsheng stated that iron ore is still tightly supplied in the short term, and the real excess capacity may have to wait until around 2013. However, there is no doubt that the dependence on iron ore is decreasing, which can increase the bargaining power of Chinese iron and steel enterprises in iron ore trade.

The price of imported ore is expected to fall below US$110. In addition to China’s gradually escaping pressure from the three major mines, Wang Xiaoqi also predicted yesterday that at present, iron ore prices have generally entered a downward trend. This year, the price of iron ore is expected to fluctuate. If the domestic steel market shrinks further, the price of imported iron ore may fall below US$110/tonne.

At the same time, an analysis report released by the China Iron and Steel Association also stated that the stock of high-priced iron ore is still high, making late-stage price rises weak. In early February, the stock of iron ore imported from major ports throughout the country once exceeded 100 million tons. Although it fell below 100 million tons in the later part of the year, it still rose for the second consecutive month. As of the end of February, the stock of iron ore in China's main ports was 98.94 million tons, an increase of 530,000 tons from the end of last month, an increase of 0.54%; compared with the same period of last year, it increased by 18.97 million tons, an increase of 23.72%. According to customs statistics, the average cif price of imported iron ore in China was 136.47 U.S. dollars per ton in January, which was a decrease of 4.77 U.S. dollars per ton from last December, and a decrease of 3.38%, falling for the fourth consecutive month.

Seeing the world’s largest buyer, China’s demand for imported iron ore continues to decline, and the three major international miners have begun to lower their positions. According to Wang Xiaoqi, the three major mines are positive about the iron ore spot trading platform established by China itself at the beginning of this year. However, after the pressure on iron ore was reduced, due to the downturn in downstream demand and other reasons, Chinese iron and steel enterprises still have a difficult profit this year.