Although China Iron and Steel Association has expressed the fact that the supply and demand of iron ore is quietly changing, the domestic spot iron ore price has been rising steadily in the near future. On August 12th, data showed that the 63.5% Indian crusher CFR price (offshore price) on the spot market rose to US$155 to US$157/ton, which already surpassed market rumors such as Rio Tinto's iron ore suppliers and Japan and South Korea. Steel companies reached a pricing agreement of $147 per tonne in the third quarter.
Objectively speaking, the domestic steel price rebounded in recent months, giving the spot iron ore prices ample "reasons" for price increases. The statistics of the Ministry of Commerce’s market operation and adjustment department recently showed that as of last week, domestic steel prices have risen for the third consecutive week, and the increase rate has increased by 1.4% from the previous week. Among them, the price of construction steel has increased significantly.
However, it is worth noting that the author compares the trend of the past month and finds that the rebound rate of iron ore prices far exceeds the price increase range of some steel products. Take the high line as an example, the increase is only about 10%, lower than the spot iron ore close to 20% increase in the past month.
“The elasticity of iron ore prices has always been an indisputable fact. But in the Chinese iron ore market, the bigger problem is still speculation.†Yesterday, Lange Steel analyst Li Wei told the author that the iron ore in the recent Stone prices, traders can not be ignored is an important promoter. The speculation of the price increase caused by speculation has attracted more traders to join the speculation.
One side of the evidence is that there are sources that the number of iron ore import companies announced by the customs has reached 204, far exceeding the 112 qualified importers announced by the China Iron and Steel Association. In addition, according to customs data, as of last week, the inventory of major iron ore in the 19 major ports in China had reached 79 million tons, exceeding the 70 million tons of stocks that the China Steel Association used to counter iron ore suppliers last year.
“But fundamentally, the source of market speculation comes from Rio Tinto and other iron ore suppliers, as well as monopolistic market behavior.†Li Wei further pointed out that on the one hand, in order to maintain the high price of iron ore, major mining companies passed Various operating methods in the shipping market have created an illusion of a large increase in China's demand and pushed up the price of iron ore; on the other hand, this behavior of increasing the price of ore has increased the psychological expectations of domestic speculators, which in turn stimulated the rise in ore prices.
“In other words, the quarterly pricing agreement, that is, the pricing mode of pricing, is the direct cause of the continuous speculation in the iron ore market. This is also the financial pain of iron ore.†Li Wei also pointed out. Before this, at the China Steel Association’s industry information conference, Luo Bingsheng, vice president of the China Iron and Steel Association, pointed out that the existing pricing mechanism lacks authority and cannot cover the real situation of iron ore price and demand in the Chinese market.
In addition, the relevant report released by the General Administration of Customs also mentioned the worrying market changes in the iron ore market: "The financial chain of 'quarterly pricing - iron ore index - iron ore swap contract' is forming, and the price fluctuations are Uncertainty will increase. This year, the quarterly and monthly pricing highly linked to the three major mining and spot markets gradually broke the psychological defenses of steel companies and pushed iron ore into 'financialization'.
However, He Rongliang, an analyst at the China Circulation Productivity Promotion Center, believes that spot iron ore prices may face adjustment risks in September. “First, the cost of steelmaking has increased, and the industry operating rate has continued to slump; secondly, the production of domestic iron ore has risen sharply and inventories have continued to remain high.†He believes that the ore price of the The upside will be suppressed.
"If it is still the long-term agreement price method in previous years, the speculative space on the spot market will not be as big as this year." Li Yu pointed out, but now, Chinese steel companies have to face the market risks brought about by fluctuations.
Regarding the status quo, some experts have suggested that China should establish an independent iron ore price index to counter the Platts iron ore index implemented by the three major mining companies. However, Li Xin believes that this financial operation is not feasible. “First of all, from the current situation in China, China cannot keep up with the financial rhythm of operation. Second, in the iron ore market, which has policies and there are countermeasures, China is not yet the three largest iron ore mines in terms of strategy. Stone vendor's opponent," he said.
"Or need to focus on oneself." Li Yu said. On the one hand, it will increase the concentration of China's steel industry so that it can hold more voices in the negotiations. On the other hand, it will continue to explore mines with autonomy, learn from Japan, increase the proportion of rights and interests, and focus on developing iron ore mines such as Africa and the Middle East. Stone vendors have not fully penetrated the market; in addition, adhere to their own rhythm, and firmly oppose the iron ore suppliers continue to promote iron ore financialization.