Recently, iron ore and steel market prices were both down, and this trend before the holiday or has become a foregone conclusion.
September 27, in the weak domestic market continues to iron powder in the road, a strong market sidelines. Imports do not change mine weak, weak-day inquiry. Mine also further lower the spot price of the tender, the Australian Pilbara iron ore fines has been slid over the highest point round 10 U.S. dollars / ton, Rob Pho is the tragic crash, fresh setback over the last tender price of $ 6 / ton.
Steel City this week, fell across the board. September 26, the Shanghai Futures Exchange, the main thread of the heavy volume on Friday, the contract continues down trend, after the fall of 4500 yuan mark is 4400 yuan mark in straight sets. Spot market, subject to the surrounding markets, confidence has been a great blow, some businesses sell into the ship has led to price kept falling over.
It is noteworthy that, after an institution is also expected, as growth in supply, demand slowed down, or falling iron ore prices from this year's $ 173 / ton to 123 in 2015 U.S. dollars / tons, reduced by 29%.
Accordingly estimates, the three largest mining companies CVRD, Rio Tinto and BHP Billiton net profit than the current level will be halved.
Public information, due to the high mineral prices, high profit pulling, BHP Billiton is spending $ 7.4 billion to the Pilbara region of Western Australia's iron minerals can be pulled up 64% in 2014 to 2.2 million tons. Rio Tinto plans to invest $ 15 billion to the region by 2015 to expand 50% of the mineral iron.
Wing futures analysts, iron ore, coke, scrap, billet fell across the board, especially the billet prices fell sharply, making the cost of steel prices have lost the support side, the spot price associated futures prices can only Powei down.
Investment Advisor in the building materials industry researcher Zou Mingxiao that the protection of the steel market housing is difficult, "the last straw." Between the end of September, focused on the protection of housing starts has been the climax near the end, led to the surge in demand for upstream steel market is unlikely, with the purchase of second and third tier cities in the policy began to bear fruit, buyers wait and see attitude was, steel market will be affected, is expected in the second half of the domestic steel prices lower is a foregone conclusion.
Statistics show that the first half of this year, domestic steel prices 33 listed total operating income of 751.298 billion yuan, an increase of 18.8%. However, net profit attributable to parent company only 15.558 billion yuan, down 24.49% over the same period last year, the inverse. China Steel Industry Association released data show that from January to July sales of medium-sized steel companies profit margin is only 3.08%, down 0.1 percentage points, far below the national industrial enterprises above designated size level of 6.11%.
Liu Haimin that iron ore prices of steel companies is good, but the iron and steel enterprises with low profits and little iron ore, mainly related to corporate structure. Before and after the financial crisis through two stages of the profit margin compared with the ore price fluctuations can be found, no relationship between the two.
However, the international iron ore prices fell sharply on the domestic mining enterprises is a challenge. He said that domestic enterprises must carefully analyze and predict the future economically recoverable ore boundaries, that is, the target mines, we must analyze and even decades after the actual future iron ore prices fell to what level, this Mine is also guaranteed to make money or at least?
In addition, Liu Haimin that, like the three major mining companies that can be dug out shipping, offshore costs only 20 U.S. dollars per ton of iron ore resources, has little or no new mine opening is not too far away, is the need for beneficiation, the cost can not be too low. In other words, China and Australia, Africa and other regions as well economically recoverable iron ore resources. In short, it should be both positive and steadily develop mines, do not wait passively.
According to the Ministry of Petroleum and Mineral Resources Government of Western Australia, Western Australia is currently invested in iron ore exploration and expansion of capital of 46.3 billion U.S. dollars. The Chinese acquisition of Rio Tinto in aluminum stake after losing three miners turned to investment in shares of competitors in order to weaken the three miners of iron ore trade control.
Goldman Sachs estimates that by 2015 the supply of iron ore for export will increase by 53%. United Nations Conference on Trade and shipping of iron ore in 2013 than they are now increasing the amount of 500 million tons / year, is likely to reach 600 million tons / year, but that the iron ore supply and demand balance for the time appeared no earlier than 2013.
Citigroup analysts predict that in 2014 the world's iron ore surplus of 50.6 million tons in 2015 surplus of 100.8 million tons. Morgan Stanley expects world steel production (referring to the demand for iron ore) increased by 8.6% this year and gradually reduced to 3.2% in 2015.
Many industry experts doubt whether the current investment projects in iron ore production can be expected, because in the past and have recently announced the extension of some iron ore project for any reason.
Also of concern is that BHP Billiton and Rio Tinto spokesman recent evaluation of future mineral prices are negative. The Australian Government recently released a report that due to Australia's ore supply growth and the world steel production in OECD countries, especially the weak, the 2012 World iron ore prices are expected to reduce to 151 U.S. dollars / ton.
China Economic Times reporter interviewed the authority of the experts predict, the future iron ore prices may drop further there was a substantial, or which would constitute a challenge to the domestic mining, but the domestic steel industry may be good.
Supply and demand imbalance, excess profits hard durable
In the iron ore business, Rio Tinto, BHP Billiton and CVRD have been three major international mining enterprises that exist profits. China **llurgical Industry Development Research Center, deputy director of economic Liu Haimin recently told the China Economic Times reporter, said that this excess profits can not be sustained.
Liu Haimin told reporters abroad in offshore construction projects hematite generally will not cost more than $ 50 per ton, no more than 80 U.S. dollars per ton of magnetite. High cost of domestic production costs per ton of ore of about $ 100 a little more. At present, 170-180 U.S. dollars / ton ore prices have significantly more than the "marginal product of resource products cost determined equilibrium price" requirements of the law.
"So, I think there ore price formation due to short-term imbalance between supply and demand of water, it makes the most inferior resources, products can reap excessive profits - a situation that can not be sustained." Liu Haimin said that the future iron ore price may further there was a substantial decline, the decline will likely more than two percent.
Good or bad, how to deal with domestic
According to West, the new route to the latest monitoring data show that in the last week of the domestic spot steel prices fell sharply, the spread of market panic mentality. In fact, recently expanded by the European debt risk, not to force the Federal Reserve "distortions" means and the U.S. economic downturn and other adverse factors, the domestic steel prices downward trend for several weeks.
This week, the steel city continued to fall, and the decline increases. Steel City for the next week, the majority of agencies believe that steel prices will continue downward momentum.
