Three major mines spot bidding, raising the price of the steel industry, the profit is worrying

Just as steel prices have fallen and most steel mills have been short-selling, the game between steel upstream and downstream has gradually warmed up. The "Economic Information Daily" reporter recently learned from a steel mill that while the three major mines strictly control the shipment of iron ore, they have recently "re-invested in the old city" and frequently conducted spot bidding, hoping to stabilize through a strong position. Push up the price of the mine. "The three major mines will allow more traders and steel mills to bid each other through open tendering. The higher prices will be obtained, and then the purpose of pushing up the price of minerals will be achieved. From the current situation, at least the iron ore price will stop falling. '." An industry insider told the "Economic Information Daily" reporter. The above-mentioned person said that in recent weeks, the spot bidding of the three major mines was extremely frequent, and domestic steel mills and traders came to participate. The market originally thought that the ore price would fall to 170 US dollars per ton, but the price of each bidding was “out of the eye.” ". Two weeks ago, the iron ore market was very depressed, but the price of BHP Billiton's 63.5% Newman powder mine reached $14.5 per ton. What is worrying is that with the monopoly of the three major mines, these spot tenders have begun to “effective”. According to the data of the combined metal network, the price of iron ore outer disk has gradually increased since last week. At present, the price of 63.5% printing powder is 177-179 US dollars/dry ton, and some quotations are above 180 US dollars/dry ton. In fact, this is not the first time that the three major mines have raised the price of ore through “reluctance to sell” and “spot tendering”. Looking back at the previous records, as early as during the negotiations of the Long Association, the three major mines used the reduced supply and spot bidding to push up the spot price of iron ore during the sensitive period of price negotiations, thus increasing the bargaining chip for the negotiations. Xu Guangjian, an analyst with the joint metal network ore channel, said that the three major mines began to implement quarterly and monthly pricing methods, which means that the monopoly of the three major mines exceeded the expectations of the people. Even in the case of low profit in the steel industry, they still get Very high profit. Since pricing is based on the iron ore index, the game around the price of this index has also become a focus. The transaction price of the spot bidding of the three major mines will also become the basis for the iron ore index. Therefore, the price of the iron ore index is pushed up by the “spot tendering”. “In the past few months, steel mills’ prices have started to fall as steel mills began to purchase more domestic mines to control costs, and steel ( 4808 , 1.00 , 0.02% ) prices have risen. If the price of ore that should have fallen at the same time is once again pushed up by the three major mines, our days will be very sad in the second half of the year." A steel mill person said on the phone to the "Economic Information Daily" reporter. It is worth noting that the current iron ore agreement price and spot price have begun to appear upside down. According to the Platts index, Rio Tinto's third-quarter long-term price is calculated as 61.5% of powder ore (PB powder) FOB price is 167.49 US dollars / dry ton; and the same type of spot mine CIF is 169.25 US dollars / Dry tons, deducting sea freight of about $8, is $161.25/dmt, and the difference is about $6. "The agreement price and the spot price difference are unlikely to exist for a long time. It can be seen from the tough performance of the three major mines in the iron ore pricing model that they will definitely fight against iron through various means (such as controlling shipments, etc.). The ore market is at risk of falling." Xu Guangjian said in an interview with reporters. "All kinds of situations have once again confirmed the monopoly status of the three major mines." A person in charge of the China Iron and Steel Association told the "Economic Information Daily" that the overall profit of China's steel industry in the second half of the year is still worrying, and will face the price of raw materials such as iron ore. High demand, reduced demand in the downstream market, tightening of macro policies and tight credit funds will all affect the profitability of the steel industry. The above-mentioned people also said that due to the upstream monopoly advantage and the dependence of China's steel industry on imported minerals, although the current iron ore prices have declined, the possibility of continued sharp decline is very small, and iron ore in the second half of the year can be expected. The prices of raw materials such as coking coal will remain at a high level. "The key to the quality of the steel industry in the second half of the year depends on the output." Xu Xiangchun, director of the information network of my steel network, said in an interview with the "Economic Information Daily" that from the current situation, steel demand will pick up in the second half of the year, and ore. The price has also been adjusted from the previous high, and the operating environment of the steel industry has improved. However, this time, we should be especially wary of the record high steel output. Xu Xiangchun said that steel mills should reasonably control production and strive to achieve a basic balance between supply and demand. Because the direct result of the increase in production is to increase the demand for raw materials such as ore, the three major mines will also use this demand signal to rapidly increase the price of ore, which will lead to a more embarrassing operation in the later stage of the steel mill. On the other hand, China's steel mills should continue to “go out” to find mines, increase the proportion of overseas equity mines, and increase the channels for importing ore to reverse the current “subject to people” situation.  

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