After the downturn, iron ore entered the “unilateral rising†channel again. The author learned from the domestic port on the 18th that 63.5% of India's foreign mining quotation for the outer disk started last week has reached US$184/ton, setting a new high for nearly three months.
"According to common practice, July and August are the traditional off-season. Even if the iron ore is warmer, it will be in September. I didn't expect it to be so fast." An iron and steel trader in Tianjin Port told the author on the phone. For him and many people in the industry, this increase is indeed a bit surprising. Because iron ore was still in a downtrend two weeks ago in early July, not only the price has fallen back to US$170 per ton, but the industry has been speculating that iron ore will continue to drop to US$165 to US$170.
The data shows that the current mainstream quotation for external disks in the outer disk of 63.5% is between 181 and 183 US dollars/dry tons. The price of 63.5% Indian powder ore in Tianjin Port was 1,330 yuan/wet ton, and 62% for Qingdao Port and 1,250 yuan/tonne for wetland. 65% of Brazil's coarse flour is quoted at 1370 yuan per wet-ton, Rizhao Port has 62% of India's fines at 1,230 yuan per wet-ton, and 62% of Australia's lump ore prices are at 1350-1360 yuan per wet-ton.
“Although the overall turnover is normal, iron ore's unilateral price increase†should not be overlooked.†A Guangxi iron ore trader told the author that this again confirms that large mines rely on monopoly status and can be realized in a short period of time. Rapidly increase ore prices and maintain prices at a high level.
It is noteworthy that foreign miners, including the three major mines, have started tightening their supplies some time ago, and have used frequent ore tenders to “pick up†ore prices. At present, the mainstream high-grade resources based on the three major mines on the market are very tense, and mines offer high prices and prices are relatively strong.
In fact, the current game between steel mills and mines is also heating up. Recently, Xu Lejiang, chairman of Baosteel, just made a judgment that “the global iron ore supply pattern is gradually coming to an end, and the iron ore price may plung in the futureâ€. On the other side, Vale’s CFO Cavalcanti stated that The Chinese government seeks to build large-scale affordable housing in the future. It is expected that the demand for iron ore in China will not decline, and it will be difficult for iron ore producers to develop new projects, which will lead to an imbalance between supply and demand that will continue for six to seven years.
“At present, credit policy tightens, raw material costs are under pressure, and steel companies are generally facing financial constraints. The purchase of raw materials such as iron ore is also curbed, and more is a wait-and-see option.†Vice President of a large steel mill in Central China Frankly, at present, steel mills maintain low inventory for about 20 days, mainly based on a small amount of replenishment stocks. According to his judgment, because iron ore is still in the state of “price rises without marketâ€, the two parties are in the game process. Once the demand for steel plants begins to pick up, the price of iron ore will “rise in heightâ€, but recently iron ore Stone prices should be hovering at the current price.
In fact, the use of "high yield and low profits" to describe the steel industry is no longer relevant. The latest data obtained by the author from China Steel Association show that from January to May, the sales income of large and medium-sized iron and steel enterprises included in the statistics of the Steel Association was 1472.0 billion yuan, the profit and tax was 76.044 billion yuan, and the total profit was 42.81 billion yuan, a year-on-year decrease of 0.3%. The sales margin was 2.92%. In comparison, the data for the month of May has changed. According to the same period of data, the sales income of large and medium-sized steel enterprises that were included in the statistics of the Association of Steels in May was 314.9 billion yuan, profits and taxes were 17.949 billion yuan, profits were 9.475 billion yuan, and the sales profit rate was increased to 3.01%. However, this figure was far below the level announced by the Ministry of Industry and Information Technology at the beginning of the year. The "6.2% profit rate of industrial enterprises across the country" is even lower than the one-year 3.25% bank rate.
“May is considered to be the most beautiful data handed out by the steel industry this year.†A head of the China Iron and Steel Association said to the writer. In general, the steel industry will continue to face high raw material prices such as iron ore, lower demand in the downstream market, tightening of macroeconomic policies and tight credit funding in the second half of the year.
Analysts said in an interview with the author that, from the downstream point of view, real estate and auto industries did not significantly improve in the second half of the year, and the demand for steel was also limited. At the same time, the tightening effect of the national macro-control policy and domestic steel supply exceeds demand. The factors constrained the lack of momentum in the rise of steel prices. From the perspective of upstream raw materials, the upstream monopoly advantage still exists. At the same time, China’s steel industry still has a high degree of dependence on imported ore, and the possibility of a sharp drop in the price of iron ore can be expected to be small. In the second half of the year, the prices of raw materials such as iron ore and coking coal are very low. It will remain high.
“The key to the quality of the steel industry in the second half of the year depends on the output.†A number of experts in the steel industry have both mentioned this point to the author. "High-yield" on the one hand will increase the demand for raw materials such as iron ore and lead to further "higher prices" for ore prices. On the other hand, the competition brought about by the “high-yield†steel production in China also inhibited the rise in steel prices. In the case where costs cannot be passed on, high costs can only be absorbed by the mills themselves.
Analysts said that under such circumstances, steel mills should reasonably control output and strive to achieve a basic balance between supply and demand. Avoiding high output led steelmakers to soaring demand for ore and other raw materials, adding chips for the three major mines to continue to increase ore prices in the later period.
"According to common practice, July and August are the traditional off-season. Even if the iron ore is warmer, it will be in September. I didn't expect it to be so fast." An iron and steel trader in Tianjin Port told the author on the phone. For him and many people in the industry, this increase is indeed a bit surprising. Because iron ore was still in a downtrend two weeks ago in early July, not only the price has fallen back to US$170 per ton, but the industry has been speculating that iron ore will continue to drop to US$165 to US$170.
The data shows that the current mainstream quotation for external disks in the outer disk of 63.5% is between 181 and 183 US dollars/dry tons. The price of 63.5% Indian powder ore in Tianjin Port was 1,330 yuan/wet ton, and 62% for Qingdao Port and 1,250 yuan/tonne for wetland. 65% of Brazil's coarse flour is quoted at 1370 yuan per wet-ton, Rizhao Port has 62% of India's fines at 1,230 yuan per wet-ton, and 62% of Australia's lump ore prices are at 1350-1360 yuan per wet-ton.
“Although the overall turnover is normal, iron ore's unilateral price increase†should not be overlooked.†A Guangxi iron ore trader told the author that this again confirms that large mines rely on monopoly status and can be realized in a short period of time. Rapidly increase ore prices and maintain prices at a high level.
It is noteworthy that foreign miners, including the three major mines, have started tightening their supplies some time ago, and have used frequent ore tenders to “pick up†ore prices. At present, the mainstream high-grade resources based on the three major mines on the market are very tense, and mines offer high prices and prices are relatively strong.
In fact, the current game between steel mills and mines is also heating up. Recently, Xu Lejiang, chairman of Baosteel, just made a judgment that “the global iron ore supply pattern is gradually coming to an end, and the iron ore price may plung in the futureâ€. On the other side, Vale’s CFO Cavalcanti stated that The Chinese government seeks to build large-scale affordable housing in the future. It is expected that the demand for iron ore in China will not decline, and it will be difficult for iron ore producers to develop new projects, which will lead to an imbalance between supply and demand that will continue for six to seven years.
“At present, credit policy tightens, raw material costs are under pressure, and steel companies are generally facing financial constraints. The purchase of raw materials such as iron ore is also curbed, and more is a wait-and-see option.†Vice President of a large steel mill in Central China Frankly, at present, steel mills maintain low inventory for about 20 days, mainly based on a small amount of replenishment stocks. According to his judgment, because iron ore is still in the state of “price rises without marketâ€, the two parties are in the game process. Once the demand for steel plants begins to pick up, the price of iron ore will “rise in heightâ€, but recently iron ore Stone prices should be hovering at the current price.
In fact, the use of "high yield and low profits" to describe the steel industry is no longer relevant. The latest data obtained by the author from China Steel Association show that from January to May, the sales income of large and medium-sized iron and steel enterprises included in the statistics of the Steel Association was 1472.0 billion yuan, the profit and tax was 76.044 billion yuan, and the total profit was 42.81 billion yuan, a year-on-year decrease of 0.3%. The sales margin was 2.92%. In comparison, the data for the month of May has changed. According to the same period of data, the sales income of large and medium-sized steel enterprises that were included in the statistics of the Association of Steels in May was 314.9 billion yuan, profits and taxes were 17.949 billion yuan, profits were 9.475 billion yuan, and the sales profit rate was increased to 3.01%. However, this figure was far below the level announced by the Ministry of Industry and Information Technology at the beginning of the year. The "6.2% profit rate of industrial enterprises across the country" is even lower than the one-year 3.25% bank rate.
“May is considered to be the most beautiful data handed out by the steel industry this year.†A head of the China Iron and Steel Association said to the writer. In general, the steel industry will continue to face high raw material prices such as iron ore, lower demand in the downstream market, tightening of macroeconomic policies and tight credit funding in the second half of the year.
Analysts said in an interview with the author that, from the downstream point of view, real estate and auto industries did not significantly improve in the second half of the year, and the demand for steel was also limited. At the same time, the tightening effect of the national macro-control policy and domestic steel supply exceeds demand. The factors constrained the lack of momentum in the rise of steel prices. From the perspective of upstream raw materials, the upstream monopoly advantage still exists. At the same time, China’s steel industry still has a high degree of dependence on imported ore, and the possibility of a sharp drop in the price of iron ore can be expected to be small. In the second half of the year, the prices of raw materials such as iron ore and coking coal are very low. It will remain high.
“The key to the quality of the steel industry in the second half of the year depends on the output.†A number of experts in the steel industry have both mentioned this point to the author. "High-yield" on the one hand will increase the demand for raw materials such as iron ore and lead to further "higher prices" for ore prices. On the other hand, the competition brought about by the “high-yield†steel production in China also inhibited the rise in steel prices. In the case where costs cannot be passed on, high costs can only be absorbed by the mills themselves.
Analysts said that under such circumstances, steel mills should reasonably control output and strive to achieve a basic balance between supply and demand. Avoiding high output led steelmakers to soaring demand for ore and other raw materials, adding chips for the three major mines to continue to increase ore prices in the later period.
Lihongyuan Steel Grating Co., Ltd. , http://www.steelgrating-supplies.com