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Risk of large steel enterprises can not afford to suddenly stop buying iron ore in China

    I learned from the joint metal, at present, about 63 grade iron ore in the spot price of 185 U.S. dollars / ton.
    Chinese Academy of Engineering, China Federation of Industrial Economics, said Xu, the current low international ocean freight, sea freight, which he estimates will rise up, shipping iron ore prices will soon come on up to 200 U.S. dollars / ton, and back to the original record high price.

    Because the risk is too large,swing chain steel companies can not afford. March 5, China's largest private steel enterprises steel head Sha Shen Wenrong, at present, has been suspended spot iron ore imports. He said that the spot price of iron ore reached 170 U.S. dollars / ton, I had to suspend imports.iron chain Chinese Academy of Engineering, China Federation of Industrial Economics, said Xu, according to the conditions agreed to before the Japanese accepted the asking price three mines, China's steel industry will once again fell into the plight of a loss.

    This is the face of intransigence three mines and iron ore spot prices soaring all the way to the situation, the first time publicly that the Chinese steel companies to suspend imports of iron ore spot.

    Shen Wenrong said, when in the absence of imported iron ore spot, has been using its own iron ore stockpiles. For the current three mines of iron and steel enterprises and temporary contracts signed, Shen Wenrong no specific briefing, said the various enterprises according to their different circumstances are different.

    However, the March 5 Academy of Engineering of China, China Federation of Industrial Economics Xu said that although the first quarter of this year, including China, the global steel industry has shown a recovery, but the profitability of key steel enterprises in China is only about 3% , steel stocks are rising year on year increase of 40%. If agreed by the three mines before the asking price in Japan, China's steel industry will once again fell into the plight of a loss.

    According to media reports, Nippon Steel has been reached with Brazil's CVRD tentative agreement, the April-June imports of iron ore from the latter than the price increase of about double in fiscal 2009, the price increased to 100-110 U.S. dollars / ton. This is basically the three mines currently in the asking price of iron and steel enterprises.

    Mining giant step pressure, disruptive long association mechanism has undergone changes in the quarterly pricing shorter become the trend. Steel expert analysis, based on pricing next game will be the focus of both supply and demand.

    Brazilian mining giant CVRD announced in the local 5-quarter earnings reported, all customers with the global reach of the long-term pricing agreements or temporary quarters, 100% of the next contract will be quarterly product sales price. The general manager of Baosteel & Partners in the first quarter results briefing for the first time the Internet statement, changes in iron ore pricing mechanism is a "trend." Media reports said that steel prices from the leading system for the collapse of a long association further confirmation.

    Out a long association system, quarterly pricing Instead, the idea of mining giant, is a step by step into reality, this year seems to be the iron ore negotiations had come to an end. Baosteel has to stand in the Steel Union in 2010 iron ore negotiations are ongoing. This iron ore "tug of war" is not the end.

    I call on March 5 confirmation Baosteel, Baoshan Iron and Steel PR without making any response.

    The shorter the pricing mechanism, the market is clearly a lack of adequate psychological preparation. An industry source told this writer, "whether now is the steel mills, dealers, or research institutions, the basic criterion for the quarter, pricing, etc. are all based on a loss, not at all clear."

    Two games, iron and steel enterprises was a disadvantage, because of production constraints, bargaining chips is limited. "But this attitude must first clear the wild speculations of mine, can not blindly give way." Lange Steel Information Research Center Houzhi Yun said. Baosteel is the attitude of flexibility, because negotiations have not ended, Baosteel receive only a temporary import prices, avoiding a quarter of the reference pricing, has maintained a two-way negotiations and promote production.

    Good for a lot of mines quarterly pricing, first proposed by BHP Billiton, Rio Tinto, the first is the introduction of the negotiations, and the first implementation Vale, showing a tacit understanding to jointly promote the formation of the three mines of the.

    Baosteel is the system of annual iron ore firm supporter of a long association, but in the three mines are even behind the quarterly pricing situation, Baosteel has admitted changes in iron ore pricing mechanism is the general trend appears. & Partners said that in this situation, the steel companies of different pricing mechanisms must be operating on the specific impact of the company, to take practical countermeasures.

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