The climax of the steel industry in China has passed, and the demand for imported iron ore is gradually cooling down. According to the latest report of an agency, this year China will usher in a record of decline in the amount of imported ore that has not been seen for many years.
The leading steel mills are observing the “change in the iron ore market†and studying the possible period of “inflection point†in the supply and demand of ore, gradually accepting the reality that the traditional ore price mechanism no longer exists, and seeking to establish a more reasonable new pricing linked to steel prices. mechanism.
China's iron and steel industry has entered a "low-speed period" and it has many aspects. Luo Tiejun, Deputy Director of the Department of Raw Materials of the Ministry of Industry and Information Technology of the People's Republic of China, clearly stated at the recently held China Steel Market Outlook and “My Steel Network†annual meeting that the steel industry is a “controlling industry†with a certain increase in output and demand. , but not much. According to statistics, during the first 10 months of this year, the increase in China's crude steel output was much lower than in Europe and Japan and South Korea.
In the past, the "heat-heavy" steel market, the reporter felt that the "platform period" of the "can not go above" the tone. In very light trading conditions, some merchants still have a "bullish mentality," but they get the result of "worry to get up." Analysts of the information organization “My Steel Network†summed up the words in an image, that is, “downward pressure and upward support are on the topâ€, and the entire steel price is at a “high pressure point†and is unlikely to appear. The common "unilateral upward" market trend over the years.
The demand for imported iron ore is cooling down in China's steel industry, which is becoming “coolingâ€. The latest research report of “My Steel Net†shows that in the first 10 months of this year, the import volume of iron ore in China was 503 million tons, which is a drop of 8% compared to last year; the annual import volume is expected to be around 600 million tons, or Lower than last year's level. "This will be the first downward trend in China's ore imports since 2007."
Xu Lejiang, chairman of Baosteel Group, the most representative steel plant in China, has repeatedly told reporters that the “hot rise†of global iron ore for many years is a phased imbalance between supply and demand and the concentration of ore resources in the world’s three largest mines. Caused by the control. With the deceleration of China's steel industry, the ore market will certainly come to a turning point. Wu Dongying, president of the Baosteel Economic Management Research Institute, also believes that we should observe the changes in the iron ore market, and as the supply and demand for ore “inflection point†approached gradually, the global mining market will exceed supply in the future.
In response to the "high ore price," China's steel industry has become more and more relaxed and capable. According to observation by mining analyst Gao Bo, steel mills mainly resolve the risk of high ore prices through three channels: First, to more effectively strengthen the use of domestic ore mines in order to reduce dependence on imported ore; second, to allow the import of ore The sources are more diversified, and the iron ore from South Africa, Ukraine, Indonesia, and Chile have all been used in China. Thirdly, foreign investment is made in a commercially viable way to increase the share of equity minerals. Since the beginning of this year, imported ore prices have broken the inertia of “unilateral ascendingâ€. There are ups and downs, and the mid-year period has reached the “bottom level†with the minimum price of only 124 US dollars.
In the situation where the supply and demand of the global mining market tends to loosen, China's steel mills have become more rational in the face of the iron ore pricing mechanism that has been quite sensitive for many years. Xu Lejiang said in an interview not long ago that the traditional long-term agreement pricing mechanism has been broken down and replaced by a more short-term pricing method. “In the current circumstances, this is acceptable.†However, the supply and demand sides need to further improve the new mechanism. The relevant person in charge of the China Iron and Steel Association has also stated that it is necessary to further study the ore price mechanism linked to steel prices.
This new idea of ​​China's steel industry has also been echoed by officials of relevant competent authorities. Luo Tiejun recently stated in Shanghai that the adjustment of the ore price mechanism includes certain rationality, eliminating the “dual-track system†of long-term cooperation price and spot price on the ore market, reducing the market risk of both parties and curbing the market's speculation space. However, the current import ore market is highly monopolized and the index on which it is based is easy to operate, which has affected the healthy development of the Chinese steel industry.
The official said that the Chinese steel industry "should have its own attitude toward the ore price mechanism." On the one hand, we must further intensify efforts to standardize the order of ore circulation; on the other hand, we must study the new pricing mechanism for imported mines linked to steel prices. Only a reasonable price-to-price relationship between the ore price and the steel price can balance the interests of the upstream and downstream, and form a stable and effective industrial chain structure.
The leading steel mills are observing the “change in the iron ore market†and studying the possible period of “inflection point†in the supply and demand of ore, gradually accepting the reality that the traditional ore price mechanism no longer exists, and seeking to establish a more reasonable new pricing linked to steel prices. mechanism.
China's iron and steel industry has entered a "low-speed period" and it has many aspects. Luo Tiejun, Deputy Director of the Department of Raw Materials of the Ministry of Industry and Information Technology of the People's Republic of China, clearly stated at the recently held China Steel Market Outlook and “My Steel Network†annual meeting that the steel industry is a “controlling industry†with a certain increase in output and demand. , but not much. According to statistics, during the first 10 months of this year, the increase in China's crude steel output was much lower than in Europe and Japan and South Korea.
In the past, the "heat-heavy" steel market, the reporter felt that the "platform period" of the "can not go above" the tone. In very light trading conditions, some merchants still have a "bullish mentality," but they get the result of "worry to get up." Analysts of the information organization “My Steel Network†summed up the words in an image, that is, “downward pressure and upward support are on the topâ€, and the entire steel price is at a “high pressure point†and is unlikely to appear. The common "unilateral upward" market trend over the years.
The demand for imported iron ore is cooling down in China's steel industry, which is becoming “coolingâ€. The latest research report of “My Steel Net†shows that in the first 10 months of this year, the import volume of iron ore in China was 503 million tons, which is a drop of 8% compared to last year; the annual import volume is expected to be around 600 million tons, or Lower than last year's level. "This will be the first downward trend in China's ore imports since 2007."
Xu Lejiang, chairman of Baosteel Group, the most representative steel plant in China, has repeatedly told reporters that the “hot rise†of global iron ore for many years is a phased imbalance between supply and demand and the concentration of ore resources in the world’s three largest mines. Caused by the control. With the deceleration of China's steel industry, the ore market will certainly come to a turning point. Wu Dongying, president of the Baosteel Economic Management Research Institute, also believes that we should observe the changes in the iron ore market, and as the supply and demand for ore “inflection point†approached gradually, the global mining market will exceed supply in the future.
In response to the "high ore price," China's steel industry has become more and more relaxed and capable. According to observation by mining analyst Gao Bo, steel mills mainly resolve the risk of high ore prices through three channels: First, to more effectively strengthen the use of domestic ore mines in order to reduce dependence on imported ore; second, to allow the import of ore The sources are more diversified, and the iron ore from South Africa, Ukraine, Indonesia, and Chile have all been used in China. Thirdly, foreign investment is made in a commercially viable way to increase the share of equity minerals. Since the beginning of this year, imported ore prices have broken the inertia of “unilateral ascendingâ€. There are ups and downs, and the mid-year period has reached the “bottom level†with the minimum price of only 124 US dollars.
In the situation where the supply and demand of the global mining market tends to loosen, China's steel mills have become more rational in the face of the iron ore pricing mechanism that has been quite sensitive for many years. Xu Lejiang said in an interview not long ago that the traditional long-term agreement pricing mechanism has been broken down and replaced by a more short-term pricing method. “In the current circumstances, this is acceptable.†However, the supply and demand sides need to further improve the new mechanism. The relevant person in charge of the China Iron and Steel Association has also stated that it is necessary to further study the ore price mechanism linked to steel prices.
This new idea of ​​China's steel industry has also been echoed by officials of relevant competent authorities. Luo Tiejun recently stated in Shanghai that the adjustment of the ore price mechanism includes certain rationality, eliminating the “dual-track system†of long-term cooperation price and spot price on the ore market, reducing the market risk of both parties and curbing the market's speculation space. However, the current import ore market is highly monopolized and the index on which it is based is easy to operate, which has affected the healthy development of the Chinese steel industry.
The official said that the Chinese steel industry "should have its own attitude toward the ore price mechanism." On the one hand, we must further intensify efforts to standardize the order of ore circulation; on the other hand, we must study the new pricing mechanism for imported mines linked to steel prices. Only a reasonable price-to-price relationship between the ore price and the steel price can balance the interests of the upstream and downstream, and form a stable and effective industrial chain structure.