China pays 26.1 billion US dollars for iron ore price increase
2024-08-09 13:11:54
The steel industry has not yet emerged from the “difficulties†of its operations. The "Economic Information Daily" reporter learned from an industry internal meeting held recently that due to the sharp rise in raw material prices, the steel industry's full-year profit in 2010 is expected to be about 85 billion yuan, after deducting investment income of nearly 8 billion yuan, the main business profit is only 770. 100 million yuan.
In fact, the profits of the steel industry have been divided by the three major mines. The "Economic Information Daily" reporter learned from the authorities that the iron and steel industry in the first 11 months of 2010 digested the price of imported ore to pay 26.1 billion US dollars, equivalent to about 175 billion yuan, equivalent to twice the main profit of the steel industry.
“If the profit of steel joint ventures is deducted, many steel companies are in a state of loss.†The relevant person in charge of China Steel Association said that it is worth noting that the profit margin of steel enterprises is at the lowest level in the national industry. Statistics from the Ministry of Industry and Information Technology show that China's steel industry has reached 630 million tons of crude steel consumption, crude steel production has reached 685 million tons, and capacity utilization rate reached 89%. However, it is difficult to convert high capacity utilization rate into higher profit margin. At present, the average profit rate of the national industrial industry is 6%, and the steel industry is only 3.5%.
“The average price of imported ore in the first 11 months of 2010 was US$126.4/ton, but the average price of imported ore in November has risen to US$145.3/ton.†The above authorities admit that if the full-year price in 2011 is based on this price It is estimated that the steel industry will at least absorb more than $11.3 billion in cost increases, which is almost equivalent to eating the industry-wide profits in 2010.
From March 23, 2010, BHP Billiton and Japanese steel mills reached a quarterly pricing agreement. The long-term cooperation model that has been in operation for 40 years has been abandoned. It has been nearly 10 months. According to foreign media reports, Brazil's Vale decided that China's iron ore export prices for the first quarter of 2011 will be based on the daily average price of the Platts index from September 1 to November 30, 2010. According to estimates, this price will increase by 8.8% to 149.20 US dollars per ton.
The reporter got the news from the port that the price of iron ore has been rising for several weeks, and the current price of 63.5 Indian ore outside the plate reached a high of 177 US dollars / ton. "We are very confident about the price of iron ore in 2011." A trader at the port of Tianjin Port told reporters.
“The steel industry will face huge risks and pressures in 2011.†The relevant person in charge of the China Iron and Steel Association said at the meeting that from the macro environment, the total foreign trade volume increased by 37.5% in 2010 and was reduced to 10% in 2011; It increased by 23.5% and was reduced to 18% in 2011. These macro indicators will curb demand for steel products, especially steel exports of 27 million tons in 2010. In 2011, this goal is difficult to achieve, and domestic demand pressure is enormous. In addition, due to domestic policies, the use of automotive panels will also be suppressed. On the other hand, the pressure of rising costs can not be underestimated, especially the price of iron ore and coking coal and sea freight.
It is worth noting that the oversupply pressure in the steel industry still exists. An authoritative person from the China Iron and Steel Association told reporters that from the release of capacity in 2010, steel investment was 303.1 billion yuan from January to November, an increase of 5.3%. In the first 11 months, the investment in smelting and rolling steel exceeded 300 billion yuan, and the annual new capacity reached 50 million to 60 million tons. Despite the current strength of the country to eliminate backward production capacity, the surplus of some large and medium-sized steel mills will continue to increase.
“Overall, the steel industry will enter the era of high cost, high price and low profit in 2011,†said the authoritative source. According to his prediction, domestic steel production capacity will increase by 5% to 6% in 2011, and the demand for ore will increase.
On the other hand, some analysts believe that the high iron ore price will accelerate the supply of iron ore. In 2011, the supply of iron ore may change the current tight situation, and may even achieve a balance between supply and demand.
According to the joint metal network forecast, 2011 is the beginning of the global iron ore production capacity release. According to statistics, the three production companies of Brazil's Vale, Rio Tinto and BHP Billiton have a total output growth of nearly 90 million tons in 2011, and other medium-sized mines such as CITIC Pacific's 27 million tons may be put into operation in 2011. In addition, Vale plans to expand its investment by nearly US$20 billion in the next three years, and Rio Tinto and BHP Billiton plan to invest more than US$8 billion.
In fact, the profits of the steel industry have been divided by the three major mines. The "Economic Information Daily" reporter learned from the authorities that the iron and steel industry in the first 11 months of 2010 digested the price of imported ore to pay 26.1 billion US dollars, equivalent to about 175 billion yuan, equivalent to twice the main profit of the steel industry.
“If the profit of steel joint ventures is deducted, many steel companies are in a state of loss.†The relevant person in charge of China Steel Association said that it is worth noting that the profit margin of steel enterprises is at the lowest level in the national industry. Statistics from the Ministry of Industry and Information Technology show that China's steel industry has reached 630 million tons of crude steel consumption, crude steel production has reached 685 million tons, and capacity utilization rate reached 89%. However, it is difficult to convert high capacity utilization rate into higher profit margin. At present, the average profit rate of the national industrial industry is 6%, and the steel industry is only 3.5%.
“The average price of imported ore in the first 11 months of 2010 was US$126.4/ton, but the average price of imported ore in November has risen to US$145.3/ton.†The above authorities admit that if the full-year price in 2011 is based on this price It is estimated that the steel industry will at least absorb more than $11.3 billion in cost increases, which is almost equivalent to eating the industry-wide profits in 2010.
From March 23, 2010, BHP Billiton and Japanese steel mills reached a quarterly pricing agreement. The long-term cooperation model that has been in operation for 40 years has been abandoned. It has been nearly 10 months. According to foreign media reports, Brazil's Vale decided that China's iron ore export prices for the first quarter of 2011 will be based on the daily average price of the Platts index from September 1 to November 30, 2010. According to estimates, this price will increase by 8.8% to 149.20 US dollars per ton.
The reporter got the news from the port that the price of iron ore has been rising for several weeks, and the current price of 63.5 Indian ore outside the plate reached a high of 177 US dollars / ton. "We are very confident about the price of iron ore in 2011." A trader at the port of Tianjin Port told reporters.
“The steel industry will face huge risks and pressures in 2011.†The relevant person in charge of the China Iron and Steel Association said at the meeting that from the macro environment, the total foreign trade volume increased by 37.5% in 2010 and was reduced to 10% in 2011; It increased by 23.5% and was reduced to 18% in 2011. These macro indicators will curb demand for steel products, especially steel exports of 27 million tons in 2010. In 2011, this goal is difficult to achieve, and domestic demand pressure is enormous. In addition, due to domestic policies, the use of automotive panels will also be suppressed. On the other hand, the pressure of rising costs can not be underestimated, especially the price of iron ore and coking coal and sea freight.
It is worth noting that the oversupply pressure in the steel industry still exists. An authoritative person from the China Iron and Steel Association told reporters that from the release of capacity in 2010, steel investment was 303.1 billion yuan from January to November, an increase of 5.3%. In the first 11 months, the investment in smelting and rolling steel exceeded 300 billion yuan, and the annual new capacity reached 50 million to 60 million tons. Despite the current strength of the country to eliminate backward production capacity, the surplus of some large and medium-sized steel mills will continue to increase.
“Overall, the steel industry will enter the era of high cost, high price and low profit in 2011,†said the authoritative source. According to his prediction, domestic steel production capacity will increase by 5% to 6% in 2011, and the demand for ore will increase.
On the other hand, some analysts believe that the high iron ore price will accelerate the supply of iron ore. In 2011, the supply of iron ore may change the current tight situation, and may even achieve a balance between supply and demand.
According to the joint metal network forecast, 2011 is the beginning of the global iron ore production capacity release. According to statistics, the three production companies of Brazil's Vale, Rio Tinto and BHP Billiton have a total output growth of nearly 90 million tons in 2011, and other medium-sized mines such as CITIC Pacific's 27 million tons may be put into operation in 2011. In addition, Vale plans to expand its investment by nearly US$20 billion in the next three years, and Rio Tinto and BHP Billiton plan to invest more than US$8 billion.
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