From November each year, iron ore negotiations begin to enter the most adhesive and sensitive period, and this year is no exception. However, unlike in previous years, this year is the first year of implementation of the quarterly pricing mechanism. The price of iron ore agreements in the first quarter of 2011 is about to surface.
Judging from the sources of information currently available to reporters, there is only a theoretical possibility for China to regain its annual pricing mechanism next year, and it seems that the price rise for iron ore in the first quarter is a foregone conclusion. According to Platts, the price of major iron ore products in Vale is likely to increase by 7%, while Rio Tinto's price increase will reach 8%.
This is for the domestic iron and steel enterprises that are still in the state of micro profit running. It is tantamount to fueling the flames. Statistics from the China Iron and Steel Association show that from January to October this year, domestic large and medium-sized iron and steel enterprises included in the statistics accumulated profits of less than 70 billion yuan, and the profit rate of the main steel industry was less than 2.6%.
Experts in the industry suggest that overseas rights ore mines will become the “chips†for China to reverse the passive situation of iron ore negotiations when the import mines are controlled by people and domestic mines are not “forcedâ€.
The price rise in the first quarter of next year will be a foregone conclusion. From this year, the three-time giants of Vale, Rio Tinto and BHP Billiton have officially implemented the quarterly iron ore pricing system. In the Chinese market, the international iron ore giants, led by Vale, use the Platts price index to sell iron ore. The higher the index, the more expensive it is to import iron ore. Up to now, about 105 steel mills and traders with iron ore trade qualifications in China have purchased iron ore according to the Platts Index.
By convention, according to the average index value of the fourth quarter of this year, the three giants will determine the contract price for the first quarter of 2011, and then negotiate the final price through Sino-foreign iron ore negotiations at the end of the year.
In the fourth quarter of this year, China's quarterly iron ore import prices fell for the first time during the year, a drop of more than 10% from the previous quarter. Among them, the price of the major iron ore varieties of Brazil's Vale is reduced by 10%, from US$150/tonne to US$135/tonne, equivalent to US$161/tonne CIF; Rio Tinto's price cuts reach 13%, the agreed price It is US$127/ton, equivalent to the CIF price of US$137/ton.
However, this short-term “cooling down†still has no power to change the fate of comprehensive price increases in the first quarter of next year. With reference to the iron ore index in the fourth quarter, Platts’ energy information analysis indicated that the CIF price of Qingdao Port with a 65% fine grade of ore in Vale in the first quarter of next year may reach US$166.31 per ton, which is higher than the previous unit price of US$154.86 per ton. Increased by 7%; the price of Qingdao Port of Carajas fines, 66% grade, will increase to US$172/ton. At the same time, the Australian FOB price of 62% Pilbara mixed fines of Rio Tinto may reach US$136.94/ton, which is 8% higher than the unit price of US$127/ton in the fourth quarter.
According to the calculation results of relevant domestic monitoring agencies, the price increase of major iron ore varieties in the first quarter of next year will be between 4% and 7%.
Xu Xiangchun, the director of my steel network, said that although the decline in China's steel production in the fourth quarter of this year resulted in a decrease in iron ore demand, the spot cif price of iron ore did not fall and rose, and the Sino-foreign iron ore negotiations are still in progress. Therefore, the specific rate of increase is still difficult to determine.
Domestic and foreign sources of minerals
Relevant statistics show that from January to October this year, China imported 50.354 million tons of iron ore, a year-on-year decrease of 2.2%, and the proportion of imported ore decreased from 70% in 2009 to 60%. Among them, 45.72 million tons of iron ore was imported in the month of October. As of October, the import volume of iron ore in China has dropped for 7 consecutive months.
According to the analysis of iron and steel and raw materials released by the Ministry of Commerce in the first three quarters of the year, since China's iron ore import volume reached an annual high of 59.01 million tons in March, it began to gradually decline, with a slight rebound in July. From the point of view of import structure, as the Indian government raised the iron ore export tax rates twice on December 25, 2009 and April 29, 2010, the proportion of iron ore imported from India decreased significantly, and the proportion of imports from India in August. Only 11%.
Industry experts pointed out that in addition to high demand for iron ore in other countries and regions such as Europe and the United States, the increase in home-made ore and overseas equity mines is the main reason for the decline in the proportion of iron ore imports in China.
After the financial crisis, Chinese enterprises have accelerated the pace of overseas prospecting and obtained large amounts of equity minerals through cash, equity investments, and cooperative production. At the same time, in 2010, the mining enthusiasm of domestic mining companies is increasing. Data show that in the first 10 months of this year, domestic iron ore production reached a cumulative total of 87.094 million tons, an increase of 24.4% year-on-year; of which, in October the country's raw ore output reached 95.48 million tons.
It is worth mentioning that the comparison of the price of domestic and imported mines also shows the change in the weight relationship between the two. In November, for example, domestic iron ore prices rose by 60% year-on-year and 39% over the beginning of the year. In contrast, the price of Newman iron ore sold by BHP Billiton was US$171.5/ton, which was 52% higher than the same period of the previous year. Rose 25%.
The Ministry of Commerce anticipates that as the substitution of domestic mines for imported mines continues to increase, it is expected that the annual import volume of iron ore will be around 600 million tons, and the domestic production of iron ore will reach 1.1 billion tons.
Equity mine or become a "protagonist"
Compared with foreign countries, most of which are open-pit mines, China's iron ore resources are of low grade, are buried deeply, and have high mining costs. Therefore, although domestic ore currently has a certain substitution effect on imported iron ore, this substitution effect is not expected to last long.
Experts in the industry expect that due to the limited space for continued growth of domestic mines and the fact that most of China’s overseas equity mines are under development and have not yet reached production, the basic pattern of China’s dependence on imported mines in the past two years may not change.
However, in the next few years, as China's acquisition of overseas mines proceeds in succession, the proportion of equity mines in iron ore imports will increase significantly, and China’s passive status in international iron ore negotiations may significantly change.
The China Metallurgical and Mining Enterprises Association expects that as the scale of overseas mining continues to expand, China’s equity import mines will increase from the current 50 million tons to 300 million tons. The future equity import mines may account for half of the iron ore imports.
Taking Wuhan Iron and Steel as an example, the current overseas iron ore resources controlled by the Group have reached billions of tons. This year it is expected to receive 6 million tons of overseas-developed iron ore, which accounts for 25% of the total demand. Five years later, Wuhan Iron and Steel needs Iron ore can be self-sufficient.
Hebei Iron and Steel Group also made it clear that during the "Twelfth Five-Year Plan" period, the Group will increase the annual self-sufficiency of iron ore by 5 million tons. In 2015, the self-sufficiency rate of iron ore will strive to reach 35%. Together with domestic ore sources, the Group's iron ore The degree of foreign dependence will be reduced to less than 30%.
Judging from the sources of information currently available to reporters, there is only a theoretical possibility for China to regain its annual pricing mechanism next year, and it seems that the price rise for iron ore in the first quarter is a foregone conclusion. According to Platts, the price of major iron ore products in Vale is likely to increase by 7%, while Rio Tinto's price increase will reach 8%.
This is for the domestic iron and steel enterprises that are still in the state of micro profit running. It is tantamount to fueling the flames. Statistics from the China Iron and Steel Association show that from January to October this year, domestic large and medium-sized iron and steel enterprises included in the statistics accumulated profits of less than 70 billion yuan, and the profit rate of the main steel industry was less than 2.6%.
Experts in the industry suggest that overseas rights ore mines will become the “chips†for China to reverse the passive situation of iron ore negotiations when the import mines are controlled by people and domestic mines are not “forcedâ€.
The price rise in the first quarter of next year will be a foregone conclusion. From this year, the three-time giants of Vale, Rio Tinto and BHP Billiton have officially implemented the quarterly iron ore pricing system. In the Chinese market, the international iron ore giants, led by Vale, use the Platts price index to sell iron ore. The higher the index, the more expensive it is to import iron ore. Up to now, about 105 steel mills and traders with iron ore trade qualifications in China have purchased iron ore according to the Platts Index.
By convention, according to the average index value of the fourth quarter of this year, the three giants will determine the contract price for the first quarter of 2011, and then negotiate the final price through Sino-foreign iron ore negotiations at the end of the year.
In the fourth quarter of this year, China's quarterly iron ore import prices fell for the first time during the year, a drop of more than 10% from the previous quarter. Among them, the price of the major iron ore varieties of Brazil's Vale is reduced by 10%, from US$150/tonne to US$135/tonne, equivalent to US$161/tonne CIF; Rio Tinto's price cuts reach 13%, the agreed price It is US$127/ton, equivalent to the CIF price of US$137/ton.
However, this short-term “cooling down†still has no power to change the fate of comprehensive price increases in the first quarter of next year. With reference to the iron ore index in the fourth quarter, Platts’ energy information analysis indicated that the CIF price of Qingdao Port with a 65% fine grade of ore in Vale in the first quarter of next year may reach US$166.31 per ton, which is higher than the previous unit price of US$154.86 per ton. Increased by 7%; the price of Qingdao Port of Carajas fines, 66% grade, will increase to US$172/ton. At the same time, the Australian FOB price of 62% Pilbara mixed fines of Rio Tinto may reach US$136.94/ton, which is 8% higher than the unit price of US$127/ton in the fourth quarter.
According to the calculation results of relevant domestic monitoring agencies, the price increase of major iron ore varieties in the first quarter of next year will be between 4% and 7%.
Xu Xiangchun, the director of my steel network, said that although the decline in China's steel production in the fourth quarter of this year resulted in a decrease in iron ore demand, the spot cif price of iron ore did not fall and rose, and the Sino-foreign iron ore negotiations are still in progress. Therefore, the specific rate of increase is still difficult to determine.
Domestic and foreign sources of minerals
Relevant statistics show that from January to October this year, China imported 50.354 million tons of iron ore, a year-on-year decrease of 2.2%, and the proportion of imported ore decreased from 70% in 2009 to 60%. Among them, 45.72 million tons of iron ore was imported in the month of October. As of October, the import volume of iron ore in China has dropped for 7 consecutive months.
According to the analysis of iron and steel and raw materials released by the Ministry of Commerce in the first three quarters of the year, since China's iron ore import volume reached an annual high of 59.01 million tons in March, it began to gradually decline, with a slight rebound in July. From the point of view of import structure, as the Indian government raised the iron ore export tax rates twice on December 25, 2009 and April 29, 2010, the proportion of iron ore imported from India decreased significantly, and the proportion of imports from India in August. Only 11%.
Industry experts pointed out that in addition to high demand for iron ore in other countries and regions such as Europe and the United States, the increase in home-made ore and overseas equity mines is the main reason for the decline in the proportion of iron ore imports in China.
After the financial crisis, Chinese enterprises have accelerated the pace of overseas prospecting and obtained large amounts of equity minerals through cash, equity investments, and cooperative production. At the same time, in 2010, the mining enthusiasm of domestic mining companies is increasing. Data show that in the first 10 months of this year, domestic iron ore production reached a cumulative total of 87.094 million tons, an increase of 24.4% year-on-year; of which, in October the country's raw ore output reached 95.48 million tons.
It is worth mentioning that the comparison of the price of domestic and imported mines also shows the change in the weight relationship between the two. In November, for example, domestic iron ore prices rose by 60% year-on-year and 39% over the beginning of the year. In contrast, the price of Newman iron ore sold by BHP Billiton was US$171.5/ton, which was 52% higher than the same period of the previous year. Rose 25%.
The Ministry of Commerce anticipates that as the substitution of domestic mines for imported mines continues to increase, it is expected that the annual import volume of iron ore will be around 600 million tons, and the domestic production of iron ore will reach 1.1 billion tons.
Equity mine or become a "protagonist"
Compared with foreign countries, most of which are open-pit mines, China's iron ore resources are of low grade, are buried deeply, and have high mining costs. Therefore, although domestic ore currently has a certain substitution effect on imported iron ore, this substitution effect is not expected to last long.
Experts in the industry expect that due to the limited space for continued growth of domestic mines and the fact that most of China’s overseas equity mines are under development and have not yet reached production, the basic pattern of China’s dependence on imported mines in the past two years may not change.
However, in the next few years, as China's acquisition of overseas mines proceeds in succession, the proportion of equity mines in iron ore imports will increase significantly, and China’s passive status in international iron ore negotiations may significantly change.
The China Metallurgical and Mining Enterprises Association expects that as the scale of overseas mining continues to expand, China’s equity import mines will increase from the current 50 million tons to 300 million tons. The future equity import mines may account for half of the iron ore imports.
Taking Wuhan Iron and Steel as an example, the current overseas iron ore resources controlled by the Group have reached billions of tons. This year it is expected to receive 6 million tons of overseas-developed iron ore, which accounts for 25% of the total demand. Five years later, Wuhan Iron and Steel needs Iron ore can be self-sufficient.
Hebei Iron and Steel Group also made it clear that during the "Twelfth Five-Year Plan" period, the Group will increase the annual self-sufficiency of iron ore by 5 million tons. In 2015, the self-sufficiency rate of iron ore will strive to reach 35%. Together with domestic ore sources, the Group's iron ore The degree of foreign dependence will be reduced to less than 30%.