Iron ore pricing power struggles

At the “2013 China Iron Ore Conference” held at the end of February, Li Xinxing, executive vice chairman of China Iron and Steel Association, publicly stated that the three major mining giants have raised ore by strictly controlling iron ore shipments and frequent spot bidding. price. At present, about two-thirds of the world's 1 billion tons of seaborne iron ore is sold to China.

Import license qualification "release"?

China Steel Association is expected to announce the list of companies with import qualifications in the first half of the year.

For the recent widespread news, an insider from the Development Research Department of the North Mining Institute told the reporter that due to lack of official documents and notices, the North Mines is currently not good enough to comment on whether the above provisions will be implemented.

At a press conference held by the Ministry of Industry and Information Technology on April 23, the spokesman of the Ministry of Industry and Information Technology and the Director of the Operation Monitoring Coordinating Bureau Xiao Chunquan said in an interview with the media that he had not heard about the fact that iron ore import qualification companies had to go to the North Mine. To such news.

“I think the above regulations should be an idea in the iron ore industry, but it is unlikely that an official document will be formed.” The commodity trading platform Treasure Island iron ore analyst Wan Shan told reporters after 2005, China has cancelled the qualifications for importing iron ore from more than 400 companies. The purpose is to standardize the market and prevent traders from pushing up the price of iron ore through “reverse mining”. However, after 8 years, the effect was minimal.

Obviously, this message itself conveys the message that the import license qualification may be “relaxed”, making the market more excited.

“We still hope that the iron ore import qualifications can be liberalized.” Jiang Jiang, a trade group in Hebei Tangshan responsible for import and export, told reporters that in 2011 the company’s application for import and export qualifications to the Minmetals Chemicals Import & Export Chamber of Commerce was not approved, but the company and Indonesia A mine has already talked about the cooperation in importing iron ore. Because there is no import qualification, it can only through the agent cooperation with a Tianjin trader, and the company has therefore paid a high clearance fee.

In manager Jiang's view, loosening the import qualification of iron ore will help encourage more steel companies or traders to import iron ore from multiple channels, which will also help maintain domestic iron ore price stability.

According to the data, the list released by the Ministry of Commerce in 2011 shows that China currently has 105 iron ore qualified companies, among which there are 65 steel companies and 40 traders. In accordance with the "review once every two years" approach, in 2013 the import qualification will be re-reviewed.

However, there is no official position on whether or not the import qualification of iron ore is tightened or relaxed.

Previously, Zhang Changfu, deputy chairman of China Iron and Steel Association, stated that under the guidance of the Ministry of Commerce, the China Steel Association and the Minmetals Chamber of Commerce is currently working to clean up companies that have iron ore import qualifications. It is expected that companies with import qualifications will be announced in the first half of the year. .

Wanshan said that imported mines account for 70% of domestic steel mills' usage. Foreign mines are more accustomed to free markets. The government should preferably reduce its intervention. No matter where traders trade, as long as they do not violate the law, the government has no reason to allow traders to enter the North Mine.

The amount of Northern Iron Ore Mine's trading volume in 2012 was less than 1% of the total iron ore imported by China.

Although the North Korea Exchange will not comment on whether this measure will be implemented, it is not difficult to see that if the news is true, the biggest beneficiary is the one that was established only a year ago.

On May 8, the North Mines will soon receive a one-year-old "birthday". However, in the first year since its establishment, the trading volume of the North Mine has been far lower than the previous 20% market expectation.

According to the announcement of the Northern Mining Institute, as of the end of 2012, the total number of applications was 1,100, with a total of 92.96 million tons; the total transaction volume was 57 and the number was 7 million tons. China, as the world's largest importer of iron ore, imported 740 million tons of iron ore in 2012. ——The trading volume of the platform is less than 1% of the total import volume.

At the “2013 China Steel Planning Forum” held on April 13, Luo Tiejun, deputy director of the Department of Raw Materials of the Ministry of Industry and Information Technology, said that the iron ore trading platform is still very difficult for one year, and 7 million tons of trading volume cannot guide prices at all.

The establishment of the North Exchange is establishing the iron ore pricing mechanism. Assuming that the trading platform reaches 20% of the import volume, it is expected that there will be a “speech right” in the pricing power.

A vice president of the Beijing Mining Rights Exchange told the reporter that at present, there are altogether 210 member companies in the North Minerals Corporation, of which less than 100 have import qualifications. “We have no requirements on the qualifications of the member companies in the import, but only make a request for the company’s trade volume,” said the vice president. At present, the requirements for joining the platform are that the trading volume of iron ore needed to be more than 300,000 tons in the previous year, and the companies should provide the North Mines with invoices and other relevant proof materials.

He said that although large qualified companies in China have basically joined the Northern Iron and Steel Institute's iron ore trading platform, transactions are rare and the transactions are mainly dominated by small and medium-sized enterprises.

“Since last year, the iron and steel downstream market has been sluggish, and the willingness of the steel mills to purchase goods has also been small.” For the reason why the trading platform is in a downturn, the North Mining Institute has made such a summary. Moreover, since the launch of the platform to date, it has been less than one year. Many traders and steel mills are still accustomed to traditional trading methods, so the turnover of electronic platforms is still relatively low.

Luo Tiejun said that the reasons for the low transaction volume of the three major mines at the North Mine were explained by the long price of iron ore, and there was no excess spot trading at the North Mine.

Without sufficient transaction size, it is difficult for the exchange to form a trading trend for reference pricing, and guiding prices is even more empty talk.

Iron ore ** is still preparing for iron ore ** related to the pricing power of derivatives.

In addition to spot trading, the iron ore pricing power struggle in the iron ore market is also on the rise.

On April 12, 2013, the Singapore Stock Exchange (SSE) just launched its first contract with a 62% grade iron ore price in Tianjin, China.

If you do not catch up, in the future China may still continue to passively accept international prices in the field of derivatives.

The reporter learned that in October 2012, entrusted by the National Development and Reform Commission, the “Study on the Impact of Iron Ore ** on the Development of China's Iron and Steel Industry”, a guideline of the China Securities Regulatory Commission*, was successfully accepted, and in December, Dalian’s products were The iron ore ** contract drafted by the Exchange (hereinafter referred to as "Dai Shi") was mainly completed, and the listing of iron ore ** was approved by the China Securities Regulatory Commission.

Obtaining the establishment of the China Securities Regulatory Commission is an important part of the ** product listing. This also means that the iron ore ** will eventually be listed on the DCE. During this year's ** period, Liu Xingqiang, Chairman of the Party Committee of the Dashang Party Committee and Chairman of the Board of Directors, stated that in 2013, Dashang will expand its product range, steadily promote the listing of coking coal, eggs, iron ore, and timber, and conduct follow-up product development and listing promotion. jobs.

A person in the steel industry believes that DCE has already listed two varieties of coke and coking coal. Once the iron ore** varieties land on the DCE, it will form a complete industrial chain with a variety of raw materials. The steel companies use domestic financial tools to improve their procurement channels.

As of April 21, China's iron ore port inventory was 68.09 million tons. The current iron ore prices remain at US$136.5/t. On February 20th, the price of iron ore reached a maximum of 160 US dollars / ton, in September 2012, this index was as low as 88.5 US dollars / ton per ton, an increase of more than 80%.

“Iron ore prices are expected to fluctuate in the later stages. Under the control of the giants, the price increase and decrease will make it difficult to control the cost of domestic steel mills. Therefore, iron ore** should be introduced as soon as possible to shift the risk of raw material fluctuations in domestic steel production enterprises.” Wanshan Indicated.

According to Liu Yuan, senior manager of Shanghai Iron and Steel Electronic Commerce Co., Ltd., relevant overseas exchanges have gradually introduced iron ore contracts, and Chinese iron ore imports from China's domestic steel mills and traders lack corresponding risk hedging tools. In the future disputes over the pricing power of iron ore will lose some of the right to speak.

However, the industry still has concerns about the introduction of iron ore**.

“Iron ore ** should adopt the policy of 'researchable, preplanned and carefully launched'.” Recently, Luo Tiejun said that at present, China's iron ore suppliers are too concentrated, and it is easy to create price monopoly and manipulation in the ** market. . At the same time, the iron ore industrial chain strategy of Chinese steel companies is still in its infancy. If iron ore ** becomes a platform for capitalization, the negative effects may increase the burden on steel companies.