On February 17, BHP Billiton, one of the three major miners in the world, issued the latest offer to Chinese steel mills. Offshore quotes for iron ore increased from US$155/tonne to US$168/tonne. This set the highest iron ore contract price ever, which also means that the monthly pricing mechanism that BHP Billiton strongly promotes has actually landed in China.
In sharp contrast to this, on the day before BHP Billiton raised its price, the Ministry of Industry and Information Technology released the “Operations of the Iron and Steel Industry in 2010 and Prospects for 2011â€. According to the report, last year, China’s large and medium-sized steel companies realized a profit of RMB 89.7 billion. The sales profit rate was only 2.91%, far lower than the average level of 6.2% for industrial enterprises across the country. Most steel companies last year were in a state of low profit or loss.
Multi-factor iron ore price hikes BHP Billiton pushed for monthly pricing. Although the price fell once in 2010, China's iron ore import volume began to rise again in 2011. The latest data released by China Customs recently showed that China imported 66.97 million tons of iron ore in January, an increase of 10.89 million tons from December last year, an increase of 18% from the previous month and an increase of 47.9% year-on-year. The import volume hit a record. While import volume increased, iron ore prices soared all the way. In January of this year, China’s iron ore imports amounted to US$10.44 billion, a year-on-year increase of 145.7%. The average import price of ore in January was US$151.4/t.
Zhang Lin, a researcher at the Lange Steel Information Research Center, pointed out that the extreme weather in Australia and Brazil, as well as the continued severe inflationary pressure in the country, are the main reasons driving the prices of international coking coal and iron ore. Of course, this is also related to the good expectations of the steel industry after the Spring Festival. The steel mills reserve a part of the charge stocks in advance. The iron ore traders’ strong expectation mentality makes them actively picking up goods, and the spot price of iron ore is always at the same time. Upstream channel.
The analysts are expecting that the three major mining giants will inevitably raise the contracted ore price. On February 17, BHP Billiton announced that the new iron ore price is US$168/ton, which is higher than the previous month's price increase. 8%, plus Shanghai freight, iron ore CIF price reached about 175 US dollars / ton.
This is also BHP Billiton's change in the quarterly pricing model, forcing China's steel mills to implement monthly pricing. According to the previous quarterly pricing model, the new round of quotation should be March this year. It is reported that at present, the global iron ore supply situation is still tense. Many Chinese steel companies have been taken out of BHP Billiton if they do not accept monthly pricing, and the iron ore gap will not be able to find alternative resources. As a result, many domestic steel companies, including large state-owned enterprises, have been forced to accept BHP Billiton monthly pricing.
This is undoubtedly a frustrating news for the China Steel Association, which has been hoping for iron ore pricing to return to the annual pricing model. It is reported that in January this year, the China Steel Association has led a team to Australia to negotiate, accompanied by representatives of iron ore business such as Baosteel, Wuhan Iron and Steel. However, those who participated in the negotiations admitted that in the current iron ore negotiations, the supply and demand relationship is no longer a key factor, and the dominant role of the three major mining companies plays a dominant role. At the same time, they are behind the manipulation of prices and shipping costs. It is also not controlled by negotiation.
Chinese steel companies are struggling to master overseas resources. It is learned that after investigation, China Steel Association found that quarterly pricing is already the shortest period that domestic steel mills can accept. Otherwise, it will have a great impact on the production and operation of steel plants.
The report issued by the Ministry of Industry and Information Technology on February 16 also showed that in 2010, the profits of top-tier and medium-sized iron and steel enterprises in China reached 89.7 billion yuan, profits of the top 20 companies in profits accounted for about 83%, and that of a Baosteel company accounted for about 26%. Most enterprises are in a state of low profit or loss, and the overall profitability of the industry is not optimistic.
The Ministry of Industry and Information Technology also expects that in 2011, both the high price of raw materials and the continuous fluctuations in the price of steel (4985, -27.00, -0.54%), the profit rate of sales in the steel industry will still be lower than the average level in the industrial sector.
For Chinese steel companies, when negotiations on iron ore are almost impossible to make progress, the most realistic way to change the status quo and increase the profitability of the industry is to accelerate the pace of mastering overseas mine resources.
In recent years, Wuhan Iron & Steel has taken the lead in this regard. On February 15th, Wuhan Iron & Steel and Canadian ADI Resources signed an ore resource cooperation project. On February 17, Wuhan Iron and Steel signed a cooperation project with the Canadian Century Iron Ore Holding Company. The two contracts are aimed at further enhancing the protection capabilities of Wu Steel's iron ore resources and expanding the efficiency growth points of both parties.
It is understood that Wuhan Iron & Steel has invested and developed eight iron ore resources projects in Canada, Brazil, Australia, Liberia, Madagascar and other countries, and the number of locked-in equity resources reached 10 billion tons, making it the largest resource-owned manufacturer among global steel manufacturers. . It is expected that during the “Twelfth Five-Year Plan†period, Wuhan Iron & Steel will basically realize the self-sufficiency of mine resources.
In sharp contrast to this, on the day before BHP Billiton raised its price, the Ministry of Industry and Information Technology released the “Operations of the Iron and Steel Industry in 2010 and Prospects for 2011â€. According to the report, last year, China’s large and medium-sized steel companies realized a profit of RMB 89.7 billion. The sales profit rate was only 2.91%, far lower than the average level of 6.2% for industrial enterprises across the country. Most steel companies last year were in a state of low profit or loss.
Multi-factor iron ore price hikes BHP Billiton pushed for monthly pricing. Although the price fell once in 2010, China's iron ore import volume began to rise again in 2011. The latest data released by China Customs recently showed that China imported 66.97 million tons of iron ore in January, an increase of 10.89 million tons from December last year, an increase of 18% from the previous month and an increase of 47.9% year-on-year. The import volume hit a record. While import volume increased, iron ore prices soared all the way. In January of this year, China’s iron ore imports amounted to US$10.44 billion, a year-on-year increase of 145.7%. The average import price of ore in January was US$151.4/t.
Zhang Lin, a researcher at the Lange Steel Information Research Center, pointed out that the extreme weather in Australia and Brazil, as well as the continued severe inflationary pressure in the country, are the main reasons driving the prices of international coking coal and iron ore. Of course, this is also related to the good expectations of the steel industry after the Spring Festival. The steel mills reserve a part of the charge stocks in advance. The iron ore traders’ strong expectation mentality makes them actively picking up goods, and the spot price of iron ore is always at the same time. Upstream channel.
The analysts are expecting that the three major mining giants will inevitably raise the contracted ore price. On February 17, BHP Billiton announced that the new iron ore price is US$168/ton, which is higher than the previous month's price increase. 8%, plus Shanghai freight, iron ore CIF price reached about 175 US dollars / ton.
This is also BHP Billiton's change in the quarterly pricing model, forcing China's steel mills to implement monthly pricing. According to the previous quarterly pricing model, the new round of quotation should be March this year. It is reported that at present, the global iron ore supply situation is still tense. Many Chinese steel companies have been taken out of BHP Billiton if they do not accept monthly pricing, and the iron ore gap will not be able to find alternative resources. As a result, many domestic steel companies, including large state-owned enterprises, have been forced to accept BHP Billiton monthly pricing.
This is undoubtedly a frustrating news for the China Steel Association, which has been hoping for iron ore pricing to return to the annual pricing model. It is reported that in January this year, the China Steel Association has led a team to Australia to negotiate, accompanied by representatives of iron ore business such as Baosteel, Wuhan Iron and Steel. However, those who participated in the negotiations admitted that in the current iron ore negotiations, the supply and demand relationship is no longer a key factor, and the dominant role of the three major mining companies plays a dominant role. At the same time, they are behind the manipulation of prices and shipping costs. It is also not controlled by negotiation.
Chinese steel companies are struggling to master overseas resources. It is learned that after investigation, China Steel Association found that quarterly pricing is already the shortest period that domestic steel mills can accept. Otherwise, it will have a great impact on the production and operation of steel plants.
The report issued by the Ministry of Industry and Information Technology on February 16 also showed that in 2010, the profits of top-tier and medium-sized iron and steel enterprises in China reached 89.7 billion yuan, profits of the top 20 companies in profits accounted for about 83%, and that of a Baosteel company accounted for about 26%. Most enterprises are in a state of low profit or loss, and the overall profitability of the industry is not optimistic.
The Ministry of Industry and Information Technology also expects that in 2011, both the high price of raw materials and the continuous fluctuations in the price of steel (4985, -27.00, -0.54%), the profit rate of sales in the steel industry will still be lower than the average level in the industrial sector.
For Chinese steel companies, when negotiations on iron ore are almost impossible to make progress, the most realistic way to change the status quo and increase the profitability of the industry is to accelerate the pace of mastering overseas mine resources.
In recent years, Wuhan Iron & Steel has taken the lead in this regard. On February 15th, Wuhan Iron & Steel and Canadian ADI Resources signed an ore resource cooperation project. On February 17, Wuhan Iron and Steel signed a cooperation project with the Canadian Century Iron Ore Holding Company. The two contracts are aimed at further enhancing the protection capabilities of Wu Steel's iron ore resources and expanding the efficiency growth points of both parties.
It is understood that Wuhan Iron & Steel has invested and developed eight iron ore resources projects in Canada, Brazil, Australia, Liberia, Madagascar and other countries, and the number of locked-in equity resources reached 10 billion tons, making it the largest resource-owned manufacturer among global steel manufacturers. . It is expected that during the “Twelfth Five-Year Plan†period, Wuhan Iron & Steel will basically realize the self-sufficiency of mine resources.