Focus on iron ore prices. In March of last year, a large number of iron and steel enterprises had to launch iron ore battles in various ports. However, this year's situation has changed. On the one hand, the price of iron ore has continued to fall and it has stumbled. On the one hand, steel mills are concerned about high positions and reduce purchases. So now in many ports, iron ore is piled up. Some unloading ships even need to queue up for unloading. See the reporter’s report from Shanghai.

Iron ore prices have been in a downward trend since the end of last year, and this trend has become more apparent at the beginning of this year. According to the latest statistics from the General Administration of Customs, the average price of imported iron ore in China in January was US$136.5/ton, which was a decrease of 9.9% year-on-year and a decrease of 16.2% compared with the previous period. In Luoshan Port, Baoshan District, Shanghai, iron ore and coke that have not been removed have been piled up on three floors outside the three floors. Almost 90% of the stockpiles have been filled with these once-famous goods.

Gao Xiang, President of Shanghai Fanmei Trading Co., Ltd.: The former situation is that there are a lot of spot goods on the port. Moreover, the current iron ore in China, especially in the north, like Qingdao and Rizhao, is very powerful.

According to reports, in Baoshan and other ports, iron ore vessels unloading at a time could not be unloaded due to lack of space. As of the beginning of March, China's major ports imported iron ore stocks of up to 101 million tons, a record high. According to the analysis in the industry, the production capacity of iron and steel enterprises still cannot be restored at the beginning of the new year. According to the statistics of the China Iron and Steel Association, since January, 12 out of 29 companies with over 5 million tons of steel production in China have suffered losses, with a loss of 41.38%.

He Jiandong, deputy general manager of Hebei Iron and Steel (000709) Group: The key is that the demand for steel plants has been reduced. Looking at it now, everyone predicts that steel has no profit now, and it may be that the ore will drop again, and normal judgments should still fall again.

Wang Jianhua, secretary-general of the International Chamber of Commerce of Shanghai Federation of Industry and Commerce for Iron and Steel Trade: In the past, many companies may have imported a large number of high-priced ore mines. These mines are now sold out and may form losses on the company's books. These mines are basically difficult to sell. Long-term stacking in the port.

Steel companies change their strategy to change "Yan mine" to "low inventory"

Compared to previous years' prices, the recent iron ore market has become a “cowhide market”. Steel companies have adopted the “low inventory” strategy of buying minerals based on orders, while ore companies have promoted the recovery of ore prices by reducing supply.

The reporter saw in the port of Shanghai that the trucks that pulled the mine were very scarce. But what is strange is that traders still keep buying goods. In the past two months, the price of iron ore has remained stable and even slightly rebounded. In September 2011, the import price of iron ore hit a record high of US$175.93/ton and quickly fell to US$130, but it recently rebounded back to around US$140.

Zhou Xucheng, general manager of Huarui International Trade Co., Ltd., told reporters: The price of iron ore was relatively stable in the past two months. The reason is that the current supply of iron ore can be balanced.

Gao Xiang, president of Shanghai Fanmei Trading Co., Ltd., told reporters: China has a cold weather this year, and the iron ore mines in the north and China are under-employed. The northeastern Hebei (iron ore) fines are basically still not coming out, and this piece needs iron ore to be filled.

Although the iron ore price is in a balanced market, the weak steel production capacity and continued downward iron ore prices have become a consensus in the industry. Some Chinese steel companies have also undergone fundamental changes in their iron ore strategy, abandoning the iron ore hoarding strategy and replacing it with current sales, which mainly consume port stocks to maintain normal production.

Zhou Xucheng, general manager of Huarui International Trade Co., Ltd., told reporters: (Originally) Steel mills usually use one month of resources at sea to float. There is one month of resources in the port inventory. In the process of transportation from the port to the steel mill, there is still nearly a month of resources. So, the production of steel mills can be stabilized.

Domestic iron ore: high cost of mining is difficult

In previous years, when the iron ore price rose continuously, it would have caused investment in domestic mines. However, the reporter recently discovered in the Huoqiu iron ore mine in Anhui that the quality of domestic ore is far lower than that of overseas mines, and the cost is higher than that of overseas. As a result, domestic mines will face very passive once they open a price war. The situation.

Anhui Huoqiu Iron Mine is known as the first iron ore mine in East China. In the last ten years, several well-known steel companies have flocked to invest. However, with the recent downturn in the import of iron ore, the cost disadvantages of domestic mines are increasingly evident.

Sun Yonghai, deputy general manager of Anhui Liutangfang Mining Co., Ltd. of Sinosteel Group, told the reporter: The development of some new mining areas in our country is basically a relatively low grade, the mining costs are relatively high, and some international rich conditions Better, especially some ore mines (compared), the cost of which is certainly much higher

Anhui Jinan Mining Co., Ltd. Party Committee ** Zhou Xinlong told reporters: Our current mining cost amortization to 597 yuan per ton of concentrate powder, nearly 600 yuan, the cost is relatively high. Our average grade is 24%, 25% or so, and we can select 1 ton concentrate powder for more than 3 tons. However, for foreign countries, you can see 50% grades like Australian and Brazilian minerals. They sometimes become waste stones. Abandoned, it will become a baby in China.

The iron ore grade is iron content in general terms. Australia, Brazil, India and other foreign mineral grades are all around 60%, while the average grade of domestic iron ore is basically between 20% and 40%. Before the price of imported iron ore was at a high of US$170, the cost performance of domestic iron ore was still outstanding. However, the current import of iron ore has already drastically slashed the price to US$140. The price advantage of domestic mining companies has been lost. According to industry insiders, this makes it possible for only the international ore to increase its price, and the country can exploit it, otherwise it can only close.

Anhui Jinan Mining Co., Ltd. Party Committee ** Zhou Xinlong told reporters: At present (per ton) more than 1,200 yuan of the price we are still quite satisfied, but it is said that in the foreign three major mining giants they can withstand the following 100 US dollars, and if domestic Really reach 100 US dollars, most domestic mines can not afford, will face the suspension of production

Zhou Jucheng, general manager of Huarui International Trade Co., Ltd., told reporters: The price of iron ore imported from foreign countries is very low for western large-scale finished products. Their CIF price may be 30 to 40 US dollars, and the high point may be 50 yuan. U.S. dollars can be done.

Iron ore: The era of profiteering or the end of the acquisition of a mine is a positive solution

In the interview, many people in the industry believe that it will be difficult for the domestic steel companies to fundamentally change their dependence on imported iron ore within the next ten years. However, China’s economic growth rate is actively lowered and steel production capacity is shrinking, which means iron ore Stone’s era of huge profits is ending.

In the supply of iron ore in China, the proportion of imported ore abroad exceeds 50%. In the future, only by relying on the expansion of China's scrap market and the increase in overseas equity mines can this issue be fundamentally reversed.

Sun Yonghai, deputy general manager of China Steel Group Anhui Liutangfang Mining Co., Ltd., told reporters that if it does not depend on the international market, I think it is unlikely in the next few years. It may also develop with time. After a few years our scrap will reach a certain level. After energy, there will be some impact on the price drop of iron ore

Gao Xiang, the president of Shanghai Fanmei Trading Co., Ltd., told reporters that the final change will require Chinese companies to go out and develop a very mainstream mine. Some large central SOEs will take this path and wait until this process is completed before there will be a fundamental change.

According to the reporter’s understanding, apart from owning mines in various ways, the core of imported iron ore is in the ore index. The three major mining groups all use the Platts Index. Its drawback lies in the fact that the annual global trade volume of iron ore exceeds 1 billion tons. The Platts index price sample of the Chinese market is only slightly higher than 100 million tons, which is equivalent to only one tenth of the weight. The domestic steel companies that are big buyers are obviously hard to agree with.

Gao Xiang, President of Shanghai Fanmei Trading Co., Ltd., told reporters that since 2011, the profit-making industry of iron ore is definitely over. With the implementation of index pricing, prices have become increasingly transparent.

Tang Xiaolan, manager of the Iron and Steel Ore Information Department, told reporters that the index currently used by the three major mines does not use our domestic index. Domestic factories, or domestic companies, should push the domestic mines to reflect China's index of an ore to negotiate with mines. Instead of using foreign indices.