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Domestic mining enterprises to cheer for the iron ore negotiations

    China has more than 800 iron and steel enterprises in 2009, output of 567 million tons of steel, pig iron production of 537 million tons, is the world's largest country with steel prices, production also ranks first in the world.
    However,swing chain as the world's largest iron ore consumer and importer, the price was not right to speak, the long-term control of others.

    In 2009, domestic steel prices to strengthen enterprises with powerful combination, cross-regional mergers and acquisitions,iron chain foreign acquisitions and investment cooperation, and promote industrial upgrading. Starting this year the central government invested 3.0 billion per year, encourage and support the comprehensive utilization of mineral resources, improve resource extraction, conversion, end-consumption efficiency in the whole process. Hebei, Shandong and Guangxi have completed the task of eliminating backward production capacity throughout the year, the steel industry's structure was further optimized.

    Although China Steel Association, "2011 annual iron ore negotiations have begun," the statement has not been the response of three iron ore suppliers, but in the "mid-talk, lost every year," the shameful historical background, China-related enterprises and Foreign ministries are still free of chips and advantages of iron ore negotiations, positive momentum for the China Steel Association.

    November 17th, Tianjin Minmetals president Zhou Zhongshu at the International Mining Conference, said that with the rapid expansion of domestic exploration results, the domestic enterprises to accelerate the pace of overseas exploration and re-integration of the steel industry, domestic iron ore supply and demand will be gradually eased, "the last two years domestic iron ore supply capacity of China continued to improve, the next 3 to 5 years, is expected to more than 1.3 billion tons of domestic iron ore."

    Increase the proportion of independent mines.

    Not only Minmetals Group, China's relevant ministries and Steel Association also indirectly momentum. Ministry of Land and Resources, China Geological Survey Bureau of the Ministry of Xueying Xi said, "Our new round of land resources survey of more than 900 newly discovered mineral deposits, of which added 50 million tons of iron ore resources." Vice Minister of Land and Resources, China Secretary Wang Min Geological Survey, this year from January to September, the national iron ore production of 7.8 million tons, an increase of 25.9%.

    In contrast with the domestic ore, our dependence on foreign iron ore is declining. The latest Customs figures show China's iron ore imports 45.72 million tons in October, 6.88 million tons less than in September, down 19%. Therefore, the leading domestic steel prices Baosteel Group Chairman Xu Lejiang has to predict, "iron ore imports this year will be flat with last year, or up to an increase of 1%, the overall pattern of no significant change in supply and demand."

    At the same time, the proportion of China's iron ore interests are increasing. This year, the Wuhan Iron and Steel and other large enterprises with Venezuela, Brazil and other countries to strengthen cooperation to ensure iron ore "self-sufficiency." Zhou Zhongshu the introduction, "At present China is building interest in overseas iron ore mines at 1.9 million tons production capacity roughly equivalent to 30% of Chinese imports."

    It should be noted that the Chinese Vice Premier Li Keqiang attend the opening ceremony of the China International Mining Conference speech stressed that "China will adhere to scientific development, accelerate the transformation of the requirements of economic development, the basis of domestic development and strengthen international cooperation to take the fullest use of domestic and international markets and resources, and continuously enhance the economic and social development of energy resources and support capabilities. "

    Ore price rise is still hard to avoid?

    In the industry view, such a move and signals that China is to further build its own iron ore security system, and almost every year out of iron ore negotiations, the embarrassment of defeat and dependence on foreign iron ore. According to media reports, the China Metallurgical Mining Association, as expected, "By 2015, China's overseas equity production for iron ore and iron ore to meet the demand for raw materials in China about 70% to 30% higher than 2009. This has a foothold at home on the preliminary to break the monopoly of the international iron ore to create a new pattern of international iron ore market and iron ore resources supply system security and stability of the material basis. "

    "Must recognize that this is a good thing, to some extent is the progress of China's steel industry." Iron ore negotiations, a long-term follow people in the industry, "International Finance," the author said, but the short term, to rely on domestic ore Mine is not real and independent, "First of all, most of the lower grade of domestic ore, and the Australian mining, ore mine in Brazil and even India are not comparable; Secondly, from the overall data, China's steel prices still rely heavily on imported ore, and three iron ore suppliers dominated 70% of the global iron ore market and a high degree of shipping finance market, the advantage is obvious. "

    Business Productivity Promotion Center in circulation Rong Liang He analysts believe that a strong short-term hard to change iron ore suppliers, but China's steel industry in the future can be expected. He also predicted, "according to the existing mechanism, increase ore difficult quarter rose a quarter of ore estimated to increase one or two into the room. Meanwhile, in the first quarter ore price rise, does not mean that next year's ore price will be high. With more and more rich mineral resources in China, as well as business investment ore production began to gradually up to 2011 quarter, the trend will suffer setbacks mine. "

    Xu Lejiang a recent interview, said that the first quarter of next year, iron ore prices will remain stable and maintain the existing supply and demand. But the industry insists that "self-mining continues to increase, CISA difficult to stop iron ore negotiations in this year signed a 'Chengxiazhimeng'."

    In this regard, China Metallurgical Mining Enterprise Association consultants focus Yushu "old tune," "First of all, the relevant departments should imported ore for joint buyout, centralized leadership unified command. Second, to accelerate the elimination of backward production capacity, control of steel production capacity investment, increase domestic ore production . Finally, the amount of 1.3 billion tons of mineral formation of domestic and imported 300 million tons of mineral rights and interests of the scale, to meet the demand for domestic steel prices. "

    It is noteworthy that, I learned yesterday from the spot market, the current market "benchmark" fine ore in India has 63.5% from mid-July 124-126 U.S. dollars / ton jumped to the current 165-169 U.S. dollars / ton (CIF .) This will increase the uncertainty in the iron ore negotiations. However, He Rong-liang, "in China to start raising interest rates, the dollar rebounded under the premise of a certain, speculative demand is difficult to form long-term price support, some varieties of iron ore has fallen sharply increasing the possibility of being strong."

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