Imported iron ore is alleged to be worse and worse.

Abstract Market information asymmetry further encourages the 'confidence' of mining enterprises to take advantage of their superior position: or use the downstream emergency purchasing mentality to falsely report the situation and deliberately infringe on the interests of Chinese importers; or use some importers' lack of trade experience and self-protection. ..

The asymmetry of market information has further encouraged the 'confidence' of mining enterprises to take advantage of their superior position: or use the downstream emergency purchasing mentality to falsely report the situation and deliberately infringe on the interests of Chinese importers; or use some importers with lack of trade experience and low self-protection ability. The weakness, intentionally or unintentionally 'under the set' in quality. ”

In the context of the monopoly of the three major iron ore suppliers and the high iron ore prices, Chinese steel mills have been expanding their sources of imported iron ore in recent years in order to reduce costs, but this has also brought negative Effect - The quality of imported iron ore is declining. On August 24, a number of insiders revealed to reporters that in recent months, the frequency of unqualified imported iron ore at Chinese ports has been high. "The decline in the quality of imported minerals in China is a fact that cannot be avoided."

According to the reporter's daily inspection of Jiangsu Lianyungang and Jiangyin, Zhejiang, Shandong Huangdao and other small and medium-sized ports, the word "unqualified iron ore" has repeatedly appeared in the information disclosure of local inspection and quarantine departments. In some areas, the rate of non-conformity is even close to 70%. So, what is the cause of the decline in the quality of imported iron ore in China? How will Chinese steel mills deal with this new situation that is not new?

Quality concerns

The quality of imported iron ore in China has always existed. In 2010, Rizhao Steel and the Australian Gibson Hill Iron Mine Company were in a state of default, and the issue was also related to the quality of iron ore.

Although the quality of iron ore is “reminded” every year, in 2011, China’s import of iron ore seems to have not been able to get rid of the problems of “short and short”, “doping waste” and “excessive moisture”. According to information provided by He Rongliang, an analyst of the China Merchants Productivity Promotion Center, from January to June this year, Huangdao Port imported 45.11 million tons of iron ore, a total of 1482 batches, of which unqualified iron ore was detected. The weight is as high as 8.84 million tons, accounting for nearly 20% of the port's imports.

“Huangdao Port is the most important import port for Qingdao Customs, which is the largest importer of iron ore in China. In the first half of this year, Huangdao Port’s iron ore imports accounted for 13.5% of the national total and 53% of Qingdao Customs.” Rong Liang analysis, Huangdao Port is still the case, the situation of other ports such as Qingdao Port may be more serious.

In fact, when the reporters consulted the public information, they also found that from January to May this year, the Zhejiang Inspection and Quarantine Bureau detected 88 batches of unqualified iron ore, weighing 6.369 million tons, with a value of 992 million US dollars. Compared with the same period in 2010, the value of iron ore increased by 57.91%, but as of May, the cumulative unqualified rate of imported iron ore at the port was as high as 66.17%.

He Rongliang also told reporters that in the first half of this year, of the 5.548 million tons of iron ore imported from Jiangsu Nantong Port, 2.396 million tons were unqualified; in the Indian mines imported from the first half of the Jingtang Port, the iron ore was higher than the installed water. There were 215 batches of results submitted by the ship, accounting for 90.72% of the total batch of imported Indian mines. Just yesterday, United Metals reported on the website that from January to July this year, Lianyungang Port imported 30 batches of bulk commodities such as chrome ore and iron ore from India’s Baladibu Port, including 10 batches of short-term claims. Accounting for 1/3, the total amount claimed is $610,000.

Root in the market monopoly

Although the above problems are not new, Sheng Zhicheng, a member of the China Federation of Logistics and Purchasing Steel Logistics, found that China's imported iron ore with quality problems mainly comes from small and medium-sized mines in non-mainstream iron ore producing countries or major iron ore exporting countries.

“There is actually the helplessness of Chinese steel mills behind this.” Sheng Zhicheng analyzed the reporter. “Everyone knows that the high quality iron ore in Australia and Brazil is the best, but the high price of minerals and the three major iron ore suppliers are coming. The more inclined the spot pricing method, the steel mills have to consider how to hold the already meager profits. This has led many steel mills to look more at importing raw materials to India, Iran and even Mauritania. Although relatively low-grade iron ore is cheap, it often incorporates a lot of impurities, which in turn causes the quality of iron ore to be off."

"In the final analysis, it is because of the absolute monopoly of the three major iron ore suppliers on the market." Sheng Zhicheng said.

He Rongliang agreed with this. He specifically analyzed, "On the one hand, the status of supply and demand is not equal: high-quality iron ore resources are ultimately scarce products, especially after the old balance between supply and demand is broken (the demise of the annual pricing mechanism), market discourse rights have long been mastered On the other hand, the asymmetry of market information has further encouraged the 'confidence' of mining enterprises to take advantage of the advantages: or use the downstream emergency purchasing mentality, falsely report the situation, deliberately infringe the interests of Chinese importers; or use some imports The lack of commercial trade experience and the weakness of low self-protection, intentionally or unintentionally 'under the set' in quality. Of course, part of the reason also comes down to a small number of traders in China, in the bullish mind, regardless of the quality of imported large quantities of iron ore In order to obtain excess profits."

Some analysts even believe that "in the absence of fundamental improvement in market supply and demand, in the short term, it is impossible to fundamentally solve the problem of trade inequality and the continuous decline in the quality of imported ore."

In this regard, He Rongliang suggested that, first of all, relevant departments should improve basic work, such as inspection and quarantine departments to improve management methods, establish a sound inspection and quarantine system, and promote the experience of imported iron ore inspection and supervision mechanisms in Qingdao and Ningbo. It is difficult to pass the unqualified iron ore. Secondly, it is necessary to strengthen the interaction of functional departments - the customs, inspection and quarantine departments and other departments jointly establish the integrity record of suppliers, promote standard contract models, etc., and more importantly, improve the business capabilities of import enterprises. Thirdly, establish an industry organization, strengthen the information exchange and cooperation between enterprises through the role of the bridge of industry organizations, improve the business capabilities of traders, and open up new business models, such as through associations or functional departments, to guide enterprises to pay attention to the signing and quality of contracts. Acceptance terms.

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