China Iron and Steel Industry Association (hereinafter referred to as China Steel Association) conference this year for the first time the information was held yesterday. China Steel Association, said in 2010 the annual iron ore negotiations are under way, on behalf of the Chinese side by Baosteel, China Steel Association in charge of specific negotiations. China Steel Association, said the Chinese side insists that China will be this year's negotiations on the price model, although it will be difficult, "but this is the Chinese deserve the right not to fight would not have been."

    Release

    Ore this year, negotiations on the Chinese side insists the Chinese model

    At yesterday's information conference, China Steel Association executive vice president Luo Bingsheng said that the current 2010 annual iron ore negotiations are under way, in the iron ore negotiations, the Administration should do a good job regulating import ore trade related work, the current main task is to promote the implementation of the uniform price of iron ore, iron ore imports to the agent system.

    The former Deputy Minister of Ministry of Metallurgical Industry, China Steel Association honorary president of the Wu Xichun at the meeting said that China will adhere to in this year's negotiations on China's pricing model. It is understood that representatives of this year, Baosteel, China Steel Association in charge of specific negotiations, China Steel Association is responsible for overall coordination, while China Steel Association will decide within the office by the president of the decisions of iron ore negotiations. It is understood that the participants would be president of office include Baosteel, Anshan Iron and Steel, sand steel major domestic iron and steel enterprises number one, therefore, insisted that China pricing model is the decision of the unity of the Chinese steel enterprises.

    The so-called China price model, the core of China's imports of iron ore will no longer have long-term co-price and the spot price of two kinds of prices, but a uniform price. At present, the three foreign mining (Rio Tinto, BHP Billiton, Vale do Rio Doce) to supply steel mills in Japan and South Korea have only a long association of iron ore price, even if Japan and South Korea steel ore than planned procurement quantity, the price is also a long association in accordance with clearing price. In China, the three mines of iron ore to Chinese steel mills are supplied with a long association of the sub-ore mines and spot prices are also divided into two kinds.

    Last year, China and Australia's third largest iron ore producers FMG reached the first model of China's iron ore price agreement for sale, that FMG iron ore sold to China, according to the agreement only if both parties agreed upon a price. Subsequently, the Chinese side with the Venezuelan Mining Group signed a similar contract, the consolidation of China's pricing model. But so far, this model has not yet been recognized three major mines.

    Field

    Shelling of the old president of the Big Three maneuvering

    The information in the Steel Association conference held every quarter, has over 7 years old and in the steel industry for 50 years, China Steel Association honorary president of the Wu Xichun Yesterday was the first time to attend the conference. Although the Secretary has repeatedly reminded him not to excited, but talk about iron ore talks, Wu Xichun still very excited, "I can not silent, I am 75 years old, you should also let me excited about a return. At present, China is becoming a lot of large importer of raw materials , (adhere to the Chinese model) although difficult, but it is the Chinese side should have the right not to fight would not have been. They (the three mines) in the use of monopoly position to bully China. " Wu Xichun, said: "Three mines are to the continuous price increase? Fundamental reason is their high degree of concentration, our focus on low."

    Wu Xichun also analyzed the three major mines in the Chinese market acted in a self rain cloud cover in hand trick. He said the first half of 2008 to 2009, by the financial crisis, the world, especially the United States, Japan and Europe, a substantial cut steel prices, sluggish demand for iron ore, iron ore mine production piled the three ports. In this case, the three mines substantial price cuts, to China's smaller steel mills to sell iron ore spot, in order to meet their urgent needs. With the gradual recovery in global steel production, iron ore spot prices began to rise, so from the second half of 2009, the three major mines began to change strategy, higher-priced spot market profits in favor of China's long association mining the supply of control.

    Ironically, it is that the three major Chinese steel companies to help mine escape the financial crisis. Last year, the United States, Europe and Japan cut steel, iron ore imports decrease, while China's iron ore imports have increased by 1.8 million tons.

    Reality

    Steel prices on sales is only 2.43%

    Chinese and foreign iron ore this year the outcome of negotiations, China Steel Association said yesterday that respect, this is a commercial negotiation, during the negotiations can not predict the outcome.

    With the China Steel Association's cautious compared to the three mines and a variety of analysts have let it be known, said to be this year's iron ore price hikes, or even claimed to reach 40%, but the reporter has learned that the reality of China's steel industry conditions, but do not support this expectation.

    China Steel Association Vice Chairman Luo Bingsheng executive, said yesterday that last year, sales profit rate of China's steel industry is only 2.43%, meaning that for every 100 yuan of products sold, the profit is only 2.43. In response, the industry laments: Steel prices are not as cut-off, put money in the bank to eat the interest.

    According to Steel Association data released yesterday for inclusion in their statistics, 68 medium-sized iron and steel enterprises last year produced a total of 464.5313 million tons crude steel output over the previous year while an increase of 47.0487 million tons, an increase of 11.27%, but the main business throughout the year Sales revenues are down 10.1%, pre-tax profits fell 33.32 percent year on year, profits fell 31.43 percent, to 55.388 billion yuan.

   Imported ore prices down 34% last year, real -

    Is worth noting that, the data also show that last year China's import of iron ore to the exfactory sales declined compared with the previous year's 34.19 percent, this drop is higher than the three major mines reached with the Japanese Nippon Steel in 2009 starting price (drop 33% ), the reality of China's imports of iron ore iron ore prices last year revealed the real direction.

    In this regard, Luo explained that the decrease up to 34.19% of the exfactory sales regardless of a long association mining and ore spot, regardless of the size of steel enterprises and traders, the price of imported iron ore to steel mills.

    In fact, the General Administration of Customs figures released by the confirmation from one side of this situation - in 2009 China imported 627 million tons of iron ore than 443 million tons in 2008 increased 41.6%; the total amount of imported iron ore 50.11 billion U.S. dollars, converted full-year average price of imported iron ore of 79.8 U.S. dollars / ton, the price decline compared with 2008 average price of more than 40%.

    Difficulties

    Of iron ore into the chaos into the super -

    "Continued confusion over the order of imported iron ore, has already negotiated the price had a negative impact, affecting the conduct of negotiations." Yesterday, Luo Bingsheng iron ore trade has once again brought the issue to this headache.

    This paper introduces, according to China Steel Association, in 2009, China's total imports of iron ore than the actual demand exceeded 86 million tons or so, this figure is equivalent to 2-3 months, the National Iron and Steel Company's iron ore demand, namely the National almost a quarter of iron and steel enterprises imported iron ore is not.

    To industry sources, the excess of imports of iron ore led to the backlog in some factories, and ports, marine vessels stranded in Hong Kong to be prolonged unloading, sea freight prices, thus pushing up prices of imports of iron ore.

    Response

    China Steel Association four strokes siege

    In response to this situation, insiders pointed out: national authorities can use the opportunity to build strategic reserves of iron ore mechanism? This may be able to curb the dramatic rise of iron ore spot prices.

    Luo Bingsheng told reporters yesterday that, due to "various reasons", the strategic reserves of iron ore is not reality, "China's oil reserves, has just started, the beginning of the coal reserves have been expressed the views of a strategic reserve of iron ore, but has not been adopted by . "

    Iron ore imports for the chaos, China Steel Association, said promotion of the standard is currently being imported iron ore trade in the relevant work, concrete measures to include four points: to actively promote the domestic price of imported iron ore uniform; actively promote the implementation of the imports of iron ore Agent system, and solution to import qualified enterprises with mining issues; raise the threshold of iron ore import enterprises, reducing the number of importing enterprises; in the import trade approvals to implement the contract registration system.