The iron ore price that has been strong has experienced a sluggish trend this year, which has caused many mining traders who are in a large amount of winter reserves due to their bullish mining prices to be in trouble. The data shows that due to poor demand conditions, the domestic ore prices have only risen by more than 100 yuan in the first week after the Spring Festival, and then they have entered into a correction. Even if the mine price rose slightly at the end of March, it is still in a situation of sky-rocketing, which has also contributed to the previous mining trade. The idea of ​​a large number of vendors waiting to go up is turned into a bubble.
Most mining traders lost their winter deposits It is understood that the mineral traders who are strongly bullish on the market outlook have boldly kept their winter reserves before the Spring Festival, resulting in an instant amplification of domestic ore stockpiles. According to the Lange Steel Network information monitoring data, February 18 domestic major port stocks reached 89.59 million tons, an increase of 52.11% compared with 58.9 million tons in the same period last year.
Sun Ming, an analyst at Lange Steel Network, analyzed that strong bullish trend of the ore price after the Spring Festival also caused most miners to miss some short-term rally. A mineral trader who did not wish to be named expressed "regret".
“As of March 28, iron ore stocks in major ports in China remained at 85.49 million tons, most of which were due to stock hoarding by distributors,†the source said. “More worrying is the trend in ore prices this year. Not optimistic, it is likely to show a declining trend. At present, the mineral traders are very difficult to accept."
Small and medium-sized steel mills reduce their purchases According to a survey conducted by Lange Steel Network, poor demand is a major cause of falling iron ore prices. Nowadays, steel mills are very cautious in purchasing iron ore, especially when small and medium-sized steel plants purchase only half a month's worth of goods at a time, and the purchase volume is significantly reduced. Analysts pointed out that the reasons that lead to the reduction of ore purchases by small and medium sized steel mills are mainly due to the uncertainty of current steel demand conditions and the shortage of funds for steel mills. Steel companies are not willing to bet on the market, let alone increase the cost risk.
According to Jiang Zhiguo, a staff member of the Huaxi Iron and Steel Co., Ltd. of Tangshan Iron and Steel Group, the small and medium steel mills currently only have enough iron ore for 20 days to a month. When the market is optimistic, small and medium-sized steel mills will use enough iron ore for two or three months at a time.
“Now the market is volatile, plus the impact of real estate regulation on the market is still not clear, the national policy is still not clear, steel companies are not too afraid to stock more iron ore,†Jiang Zhiguo said.
In addition, “tight funding has also caused small and medium-sized steel mills to lack iron ore for their strength. Even if there is a slight increase in iron ore prices at the moment, there is a strong wait-and-see atmosphere and there is a situation of sky-rocketing.†Sun Ming analyzed.
The ore price is expected to fall throughout the year. Although the miners have not succeeded in gambling up the winter storage, the decline in ore prices has seen steel companies see the dawn. Zhang Yanlin, research director of China Investment Consulting Co., Ltd. pointed out that the strong earthquake in Japan caused damage to some steel mills. The destruction of power facilities led to the insufficiency of steel mills' operating capacity. The decline in production capacity led to a sharp drop in demand for iron ore in Japan, and the international iron ore trade market immediately emerged. Reaction, there has been a brief period of oversupply, iron ore prices have sharply retreated.
From the policy level, the Department of Industrial Policy of the Ministry of Industry and Information Technology has included the quality management and price negotiations involved in the future import of iron ore in China into the “Twelfth Five-Year Plan†of China's metallurgical industry for the supervision of the steel industry. At the same time, Zhang Dezhao, Director of the Iron and Steel Division of the Raw Materials Division of the Ministry of Industry and Information Technology, also revealed that he is working on how to establish a Chinese iron ore index linked to the Chinese steel market as soon as possible.
In addition to the above factors, Hu Kai, an analyst at Union Metals, a senior iron ore producer, also analyzed that since last year, the production of domestic iron ore has increased substantially, which has also eased the tight supply of iron ore to some extent. Therefore, it is expected that iron ore prices will hardly return to the $180/ton range during the year.
Most mining traders lost their winter deposits It is understood that the mineral traders who are strongly bullish on the market outlook have boldly kept their winter reserves before the Spring Festival, resulting in an instant amplification of domestic ore stockpiles. According to the Lange Steel Network information monitoring data, February 18 domestic major port stocks reached 89.59 million tons, an increase of 52.11% compared with 58.9 million tons in the same period last year.
Sun Ming, an analyst at Lange Steel Network, analyzed that strong bullish trend of the ore price after the Spring Festival also caused most miners to miss some short-term rally. A mineral trader who did not wish to be named expressed "regret".
“As of March 28, iron ore stocks in major ports in China remained at 85.49 million tons, most of which were due to stock hoarding by distributors,†the source said. “More worrying is the trend in ore prices this year. Not optimistic, it is likely to show a declining trend. At present, the mineral traders are very difficult to accept."
Small and medium-sized steel mills reduce their purchases According to a survey conducted by Lange Steel Network, poor demand is a major cause of falling iron ore prices. Nowadays, steel mills are very cautious in purchasing iron ore, especially when small and medium-sized steel plants purchase only half a month's worth of goods at a time, and the purchase volume is significantly reduced. Analysts pointed out that the reasons that lead to the reduction of ore purchases by small and medium sized steel mills are mainly due to the uncertainty of current steel demand conditions and the shortage of funds for steel mills. Steel companies are not willing to bet on the market, let alone increase the cost risk.
According to Jiang Zhiguo, a staff member of the Huaxi Iron and Steel Co., Ltd. of Tangshan Iron and Steel Group, the small and medium steel mills currently only have enough iron ore for 20 days to a month. When the market is optimistic, small and medium-sized steel mills will use enough iron ore for two or three months at a time.
“Now the market is volatile, plus the impact of real estate regulation on the market is still not clear, the national policy is still not clear, steel companies are not too afraid to stock more iron ore,†Jiang Zhiguo said.
In addition, “tight funding has also caused small and medium-sized steel mills to lack iron ore for their strength. Even if there is a slight increase in iron ore prices at the moment, there is a strong wait-and-see atmosphere and there is a situation of sky-rocketing.†Sun Ming analyzed.
The ore price is expected to fall throughout the year. Although the miners have not succeeded in gambling up the winter storage, the decline in ore prices has seen steel companies see the dawn. Zhang Yanlin, research director of China Investment Consulting Co., Ltd. pointed out that the strong earthquake in Japan caused damage to some steel mills. The destruction of power facilities led to the insufficiency of steel mills' operating capacity. The decline in production capacity led to a sharp drop in demand for iron ore in Japan, and the international iron ore trade market immediately emerged. Reaction, there has been a brief period of oversupply, iron ore prices have sharply retreated.
From the policy level, the Department of Industrial Policy of the Ministry of Industry and Information Technology has included the quality management and price negotiations involved in the future import of iron ore in China into the “Twelfth Five-Year Plan†of China's metallurgical industry for the supervision of the steel industry. At the same time, Zhang Dezhao, Director of the Iron and Steel Division of the Raw Materials Division of the Ministry of Industry and Information Technology, also revealed that he is working on how to establish a Chinese iron ore index linked to the Chinese steel market as soon as possible.
In addition to the above factors, Hu Kai, an analyst at Union Metals, a senior iron ore producer, also analyzed that since last year, the production of domestic iron ore has increased substantially, which has also eased the tight supply of iron ore to some extent. Therefore, it is expected that iron ore prices will hardly return to the $180/ton range during the year.