Almost into March, domestic and international iron ore prices continue to rise sharply, especially in imported ore price hikes most evident. To 63.5% at the end of India's latest offer mine up to 150 U.S. dollars / ton (CIF price), the cumulative rise 10 U.S. dollars higher than in February / tons. However, with increasingly intense international iron ore negotiations, in the iron ore price rise on the agreement ore providers and divergence of both steel and therefore delay the negotiations failed to reach. Three mine gradually push the agreement price target, from 50% of the initial push -90% to 80%, far exceeding the domestic steel production cost acceptable bottom line. More recently, the world's steel mills in protest against the exorbitant demands of the voices of the three mines gradually, the European Iron and Steel Union, March 11 issued a statement strongly opposed to iron ore producer price increases 80% -90%, China's steel association that has been endorsed and support of the Ministry of Commerce also said that if necessary, will provide the means to support trade. Therefore, we look forward to this year's negotiations to have a mutually acceptable result. Close to the end of the world's mining companies and steelmakers in Japan have reached a preliminary agreement is intended to be linked with the spot market, short-term contracts to replace with 40-year-old, based on annual contracts and lengthy negotiations on iron ore pricing system. This initial agreement sent the clearest signal to date that the mine operators under pressure for change, the traditional annual iron ore negotiations on a system about to die.
With the change in the system iron ore negotiations, post-market price changes will take place, the domestic iron ore prices rose significantly in March, has close to import ore prices are expected in April iron ore market as a whole will continue to show rising trend, but gains slow .
First, market trends
March of domestic iron ore prices as a whole rose. Base of iron ore negotiations by the ever-changing market prices are rising. End of the month, the domestic steel market re-emergence of "the tide", to promote production of iron and steel enterprises to maintain exuberant enthusiasm, strong demand for iron ore resources, not less. Since the early iron ore market pull up too fast, some mining companies have elected to sell their hoard resources, making iron and steel enterprises a certain stocks to add flour. One trouble is sited the international negotiations on iron ore to make iron ore market once again just around the corner. First, the three major iron ore suppliers and Japanese steel maker reached a preliminary agreement, is intended to be linked with the spot market, short-term contracts; yes, after CVRD announced officially abandoned for decades followed the annual iron ore pricing mechanism, moving towards more flexible pricing system. With the iron ore talks were gradually surfaced, mining companies on the post-election rise in confidence in the market has doubled, "bet up" mentality continues to expand, most of the ore shipments of small business, watching the atmosphere is quite thick.
With the external disk offer a new high record breaking year, imports continued to ratchet up ore market. At present, the import of ore market "spot" of the tendency to spot and mineral resources evident dominant. The collapse of the international iron ore negotiation mechanism, will lead to imported ore market, a "major reshuffle." Data show that, as of March 24, the Liaoning region 66% Tie Jingfen price of 1,100 yuan / ton, 66% Tie Jingfen Tangshan area are not tax price 870 yuan / ton about 64% in Shanxi Province are not Tie Jingfen tax-inclusive price at 770 yuan / ton about 65% of Shandong Tie Jingfen price 1230 yuan / ton about 64% in Anhui Province Tie Jingfen price of 1,200 yuan / ton, the price rise by the end of February compared with 80-150 yuan / ton .
Iron ore prices, mainly by the impact of several aspects of the one hand, significant improvement in steel trade market, prices continued to pull up, steel mills also have raised prices, trade, stock market, stocks decline; the other hand, market demand improved series of price increases throughout the mines, mining recovery is still not optimistic, the local mine production has not been completely restored; another recent prices continued to pull up outside the mine, high-grade resource constraints.
Imported ore in Australia, Brazil, is due to the spot market shipments of small, 62% PB powder ore the latest bid of up to 154-155 U.S. dollars / ton, PB blocks of ore up to 157-160 U.S. dollars / ton, 65% of Brazil's latest ore powder Price up to 158-160 U.S. dollars / ton.
Spot ore port, the current port high-grade resource constraints, traders in no hurry to sell, 63.5% Indian ore powder (water content 6-7%) Price 1110-1130 yuan / ton, that price measurement in steel procurement to exfactory sales 1250-1300 yuan / ton; 65% fine ore in Brazil Price 1170-1200 yuan / ton; Australian fine ores due to resource less, with 58% of traders bid up Yandi ore powder 1050-1060 yuan / ton. Steel is still higher than the domestic procurement of imported mineral ore prices, currently the main procurement of domestic ore. Taking into account the current domestic steel prices gradually increase in April, traders interested in the near future to continue to raise the port spot mine bid.
Second, steady growth of the domestic iron ore output
According to the National Bureau of Statistics, China's February output was 61.51 million tons of iron ore over a year grew 5.9%. 1-2 months of this year iron ore production reached 124.3 million tons, representing growth of 17.8% over the same period last year.
Entered in April, domestic mine production of basic able to resume normal production, from the historical data, 3,4 the domestic ore production in the month there will be greater growth. At the same time this year, compared with 1-2 months of iron ore production rose 17.8%, indicating that China's iron ore production capacity enhancement; in the domestic steel mills dependence on imported ore in 2008 from 50% to 70% of the current situation of Under the increase or decrease in imports of resources is particularly important, from the past data, in March, after significant growth in imports has occurred. However, the actual situation of this year, due to a time when the international iron ore negotiations in full swing with that is, the international iron ore suppliers to price increases made environment, intended to reduce shipments. Of course, is precisely because of price hikes expected to increase imports of ore traders to purchase, it will not cause much impact on imports. Overall, in April of iron ore supply situation will be more relaxed.
Third, iron ore import growth significantly, the South African mines the biggest increase in imports year
According to Chinese customs statistics show that in February 2010 China imported 4,938 tons of iron ore, imports amounted to 473,751 million U.S. dollars. China from January to February total of 9,607 million tons of imported iron ore, an increase of 21.0%, import value 893,361 million U.S. dollars, an increase of 41.1%.
Fourth, in April forecast market trend analysis:
First, the domestic supply of crude steel production is still large, iron ore demand remains strong
1-2 months in 2010 China's crude steel, pig iron and steel production were 102.89 million tons, 97.23 million tons and 117.36 million tons, up by 25.4%, respectively, 22.3% and 27.7%. Among them, in February China's crude steel, pig iron and steel output of 50.36 million tons, respectively, 47.5 million tons and 55.59 million tons, respectively, year on year growth of 22.5%, 17.2% and 18.1%. February daily average production of 1.799 million tons of crude steel, setting a record high. Combination of import and export data estimated that the domestic market in 2010 1-2 month supply of crude steel and steel resources of 99.89 million tons, respectively, and 114.47 million tons, respectively, year on year increase of 23.5% and 26.7%. Which in February crude steel and steel resources in the domestic market supply of 48.97 million tons, respectively, and 54.24 million tons, respectively, year on year increase of 19.7% and 16.4%. Can be seen from the data, supported by pre-ore demand is the main reason for rising prices.
Context of the current view of the downstream steel market, opening of the Spring Festival this year, the domestic steel market all the way up, construction steel, plates, profiles, export market, there were significant increases. From the time point of view, in April will be a demand for the release of the season, the market is still relatively optimistic about the latter part of the expected. This led to a certain extent continue to full capacity production of steel, meaning that demand for iron ore in April will remain strong.
Second, the iron ore price negotiation system and still no results
The recent market rumors, the Japanese steel prices and the global iron ore mining companies in this year's negotiations have reached a preliminary agreement, is intended to be short-term contracts and spot market to replace the 40-year-old, based on the annual iron ore contracts and negotiate pricing system. Although rumors, but not groundless, but as if a thing, then for the domestic iron and steel enterprises, as good as a blow. If the short-term contract to replace the long co-price, according to the current market price is estimated that the new year iron ore price increases will reach more than 100%. Various institutions predict that from the current market situation, or have reached 80-90% level.
Third, iron ore, steel prices rose to a tremendous pressure on production costs
Imported iron ore prices sharply higher production costs for domestic steel companies have brought tremendous pressure. Powder ore in China in 2009 the average CIF value of imports of 79.9 U.S. dollars / ton, while imports of ore CIF price quoted at the current benchmark, compared with last year's average price of imports rose 65 U.S. dollars / tons. If all the domestic steel mills using imported ore, imports of ore at current pricing levels, only the import of ore to domestic steel mills will be an increase in production costs 800 yuan / ton; and the domestic steel mills the average ratio of imports of ore at 50%, the current Price will increase the cost of domestic steel pig iron, nearly 400 yuan / ton, plus on the domestic ore, and coke and other raw materials, fuel prices this year, domestic steel production will be under tremendous cost pressure.
Fourth, high port stocks increased slightly
March iron ore imports up by a noticeable increase in ore prices and the import of the case all the way up, the port is also a noticeable increase in inventories. According to West, this new route monitoring data show that ended in late March, the 25 major ports stocks 70.8 million tons, an increase by the end of February compared with 1.95 million tons. Which an increase Jingtang Port 500000-3800000 t, Newport increased 400000-5800000 t, Lianyungang increase 500000-4800000 t, Nantong Port to increase 300000-1800000 t, Yingkou Port reduction of 200,000 tons to 190 million tons, Dalian Port to reduce 200000-3400000 t. Port stocks rose, it will have some pressure on the market.
Fifth, the sea freight operation shock
In March the international iron ore sea freight in order to shock the whole situation runs to March 24 of Brazil to 23.533 U.S. dollars China's sea freight route / ton, down 1.571 U.S. dollars compared with the beginning / ton, down .76%; Australia to China Sea freight 10.629 U.S. dollars / ton, higher than the beginning of 1.061 U.S. dollars / ton, or at 10.49%. Recent iron ore shipping market weakness in the state of Jin Xian, China, with the three iron ore giants, "reluctant sellers" relevant. Mine operators control the supply of steel raw material resources, not heavy volume or less a big bang, thus pinching the China's imports of the port, thereby creating a momentum for the ongoing iron ore negotiations. However, the negotiations as the market for iron ore prices are expected to very high, traders purchase will increase, coupled with revaluation of U.S. dollar is expected to stabilize, while international oil prices continue to rise, sea freight may be expected in April showed up trend shocks.
Total on the above, in the iron ore market surged in March, the market has room to rise further weakened, as the iron ore negotiation mechanism of the change in April the city of the overall steel demand season, the latter part of the market is expected to rise further, However, a small correction in the middle Quotes appears.
