The semi-annual report released by the three major mining giants recently showed that due to the continuous decline in iron ore prices in the international market, the profits of the mines generally fell by 30%, while the price of imported iron ore has fallen to the lowest level since October last year. This means that the good days of iron mining sharing the “bonus†of the Chinese market boom are gone. On the other hand, the three major mines are still optimistic about China's demand for overweight production, and with the overcapacity, the three major mines are likely to “change the market at low pricesâ€. Under this circumstance, the game between mines and steel mills will evolve into a game between domestic mines and international mines, and domestic mines will face a crisis of survival. The low steel price has forced the import price of minerals to fall. Recently, the price of iron ore imported ore has dropped by 1-2 dollars per day, and the price of domestic minerals is also falling. As the main sales market of the three major mines in China, the continuous decline in domestic steel prices has pushed the trend of falling import prices to become more and more obvious. Sun Ming, an analyst at Lange Steel's Furnace Materials Department, said: "From the point of view of the two rounds of decline in the price of imported minerals in the first half of this year (May, July), the pace of falling steel prices is highly consistent. After the steel price fell sharply in July, the decline in imported mineral prices began to increase, and has fallen to the lowest level since October last year. "At the same time, a wave of layoffs is spreading among the three major mines. In fact, in recent years, Chinese steel mills have suffered from the continued surge in mining prices. The three major mines have sharply increased the price of minerals by virtue of their monopoly position, and the continuous surge of mining prices has forced steel mills to pass on the cost pressure to the downstream, but the excessive domestic crude steel production has restricted the rise of steel prices, which makes mines and steel mills In the long-term unequal relationship, there was a phenomenon that the steel price rose slightly and the price of steel fell sharply, and the steel price fell sharply. The steel mills were defeated in many games with the mine. The good days of high mine prices have come to an end. Due to the slowdown in domestic economic growth and the government's strict macro-control policies, the market's growth in demand for steel products has begun to slow down, and the phenomenon of oversupply of production capacity has become increasingly serious. The “winter†of the steel industry has arrived. From the perspective of the domestic steel market price trend, since the beginning of the year, in addition to a small rebound in February and March, the trend has continued to decline, and the decline continues to expand, the entire steel industry is in a state of meager profit or even loss. The continued sluggish operation of the steel market has led to a significant decline in the market demand for imported iron ore. With the steel prices continuing to fall and the decline in June and July, steel mills, especially small and medium-sized steel mills, are more cautious about the purchase of raw materials such as iron ore. Lange analysts told reporters that the current minimum iron ore stocks in small and medium-sized steel mills in Tangshan area only lasted for a few days. The conduction effect of the fall in steel prices and the fall in imported mineral prices has become apparent. Imported mineral prices, which have been strong in the previous period, have seen a significant decline since July and have now fallen to their lowest level since October last year. Over-capacity is a semi-annual report issued by the three major mining giants. According to the continuous decline in iron ore prices in the international market, the profits of the mines are no longer as good as in previous years: in the case of Vale, the world's largest miner In the second quarter, the profit was 2.662 billion US dollars, a decrease of 58.7% compared with the same period of last year. Although Rio Tinto's iron ore production and sales in the first half of the year was strong, its profit was down 22% from the same period last year. However, the three major mines are still betting on Chinese demand. Rio Tinto will continue to adhere to this year's $16 billion spending plan, with most of the $16 billion going to iron ore production in western Australia. Vale is expected to see a recovery in spot iron ore prices in September, mainly due to a recovery in demand and a low level of iron ore stocks in China. FMG said that iron ore production capacity will nearly double to 155 million tons in the coming year. In this regard, Lange analyst Zhang Lin told reporters that for many years, Iron Mining has been sharing the "dividends" of the global steel market boom, and has absorbed a considerable portion of the profits in the steel industry chain. The "dividends" made the Australian government take up the idea of ​​collecting mineral resources rent tax, and it made a lot of noise. The maintenance of the "dividends" is a period of time. From the long-term and essential analysis, the factors that determine the price of iron ore: one is the overall supply and demand relationship, and the other is the production cost of iron ore products. China's high steel production capacity has created a high demand for iron ore, which is indeed a good condition. However, due to various domestic and international influences, steel consumption is not coming up. Chinese steel companies continue to struggle in the cost line. The continuous decline of steel prices will inevitably drag down the price of the mine, because the steel industry and iron mining are both dependent on each other. In this industry, this is a win-win market. The steel mill is a downstream user of the ore. When the steel mill's monthly sales profit margin has fallen to -0.04%, the return on the ore resource products is not surprising. As for the various bets on the “expanding production and investment unshakable†of the overseas mines, I am afraid that they are overdrafting their future expenditures. Because if China's steel market maintains this downturn, there is still a lot of room for the ore to fall. The game of imported ore and domestic mines began to open with the sharp drop in imported mineral prices. At present, the prices of imported ore and domestic mines are quite close, and the low-price advantage of domestic mines has gradually disappeared. Han Weidong, president of Beijing Zishi Real Estate Co., Ltd., told reporters that “the price game between imported and domestic mines has just begun. Although the industry has been calling for a reduction in dependence on imported iron ore, it is considered that the cost of domestic mine development is much higher than that of imported mines. I believe that the domestic dependence on imported minerals will only become higher and higher in the future.†According to the market monitoring of Lange Steel Information Research Center, as of August 17, Tangshan 66% acid wet tax-free mainstream market price 820-830 Yuan, Tianjin Port 61% India powder mine offer 810 yuan, 63.5% India powder mine offer 880 yuan, 62% Australia PB lump ore offer 900 yuan. The price gap between imported and domestic mines has become smaller and smaller. Han Weidong said that the domestic imported mines have fallen from the high level of 180 US dollars last year to the current price level of about 110 US dollars. Considering that the price of 110 US dollars is already the profit and loss line of most domestic mines and even the life and death line, he believes that the import price of minerals will be imported for some time to come. It will float around $20 for the price of $110, and the price of around $110 will become the norm. "At present, the development cost of new mines in China is very high, and they are all poor mines. The market does not give opportunities for mining. The game between mines and steel mills will evolve into a game between domestic mines and international mines in the future." Han Weidong said, "Domestic mines are close to the cost of production. If they fall another 100 yuan, many enterprises will lose money. If they fall another 200 yuan, there will be almost no profitable mines. The average cost of imported mines is 40 to 50 dollars. From this perspective, the steel industry and imported mines, the import of minerals and the domestic mining game have just begun." He said that there are two possibilities for future iron ore market competition, one is once the steel mills reduce production range plus Large, will face serious iron ore overcapacity, foreign mines may cut prices to seize the domestic mine market. Low-cost domestic mines may have a small profit, but high-cost mines have minimal living space and may exit the market.
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