CISA insists China's price is down 40%

Iron ore negotiations in the Asian bloc collapsed for several months the iron ore negotiations finally settled the first single, Rio Tinto and Nippon Steel to reach a 33% association. For this starting price, Shan, secretary general of China Iron and steel Industry Association, said in an interview with the Chinese times: "The price is far from enough, if the domestic steel companies in accordance with such prices to buy, the more we buy the more compensation, we must adhere to the principle (down to 2007 years of pricing basis to talk again).　　"In this regard, industry experts believe that the determination of the initial price will be possible for the miners to add new bargaining chips, but international practice as early as last year has been broken, China also has reason to insist on the end, the two sides game is rapidly escalating, the interests of many contradictions intensified." Industry-wide losses are beneficial to the Chinese asking for May 26, Rio Tinto and Nippon Steel reached an ore price agreement, the Pilbara region of the mixed powder and di powder mine execution price of 97 cents/dry metric tons, block ore execution price of 112 cents/dry metric tons, the long-term contract prices this year respectively than last year down 32.95% and 44.46%.　　The next two days, May 28, the South Korean steel company said it had also reached an ore price agreement with Rio Tinto, following the index agreement reached by Nippon Nippon Corp. and Rio Tinto. In the intense iron ore negotiations, there are few new chips available for the two sides right now.　　In the view of the three major miners, the IPO price has far exceeded their previous 20% concessions, and this concession will be the next major bargaining chip with the Chinese side, if the European and other regional mills choose to follow up, China's pressure will be doubled.　　However, China this year from January to April, the total loss of steel industry has become a fact, such a price can not change the current loss of domestic steel enterprises, from China over the years to the huge demand and the current market demand situation, the industry is still conducive to the Chinese price. CISA statistics show that from January to April this year, the domestic 72 large and medium-sized steel production enterprises to achieve overall profit loss of 5.179 billion yuan, with the same period last year to achieve profits of 63.401 billion yuan to form a strong contrast.　　By the end of April, 29 enterprises had lost money, of which 4 losses were added in April. "The market economy in the past is good, even if iron ore prices are crazy, steel companies are still profitable, so, no one to care about the growing production costs, and miners profiteering." Now, the market environment deteriorated, miners should be diverted, let iron ore prices return to standard.　　Shandong Iron and Steel Group A high level in the interview with the voice of the press firm.　　He said he would stick to the insistence of CISA, "CISA represents the public aspiration and aspirations of China's steel companies, but if China's leading enterprises can stand up again at this critical juncture, we will have more confidence in the negotiations." Spot price upside down firm China's confidence to learn from the steep price rises in 2008, the Chinese side of the negotiations this year has been tough: "Prices must fall to 2007 years of long-term benchmark, the two sides have more room for negotiations, the initial price and China's target price is far apart." "For a long time, theMore than 40% of the decline is actually mainly refers to the price of ore, because more than 80% of domestic imports are powder ore. Hu Yanping, analyst at the Joint Metals Research Center. Japan and Australia reached the PB powder ore (grade 62%) Price of 60.14 U.S. dollars/ton, currently, Australia to China's port shipping cost of 12.6 U.S. dollars/ton, PB powder to the shore price of 72.74 U.S. dollars/ton, more than the current powder ore to the shore spot price high 5 U.S. dollars/　　Tons, if the import tariff and Hong Kong incidental charges, PB powder ore to the port delivery price is 575 yuan/ton (wet base car plate price), compared with the current spot price of 25 yuan/ton. "Spot iron ore prices have been slipping since the second half of May and there are no signs of a rebound," he said.　　"The reason for this is three," said Ming, an analyst at Lange Steel Network. First of all, after the production of large steel enterprises, the demand for iron ore has a certain decline; second, the iron ore demand for steel enterprises have been basically completed, most enterprises have been in advance to purchase cash to ensure inventory; Finally, the decline in steel prices will inevitably affect iron ore prices fall. "There is no new bargaining chip on both sides of the bargain, and the next step is the final sprint of the negotiators ' psychological game," he said.　　"China has reason to stick to it," said Xiangchun, senior analyst at the Steel Network.　　As usual, other supply and demand companies would follow unconditionally after an agreement was reached by any of the two parties in the international ore negotiations, but last year Rio was the first to break the rule, with a 79.88% per cent rise in the powder deal with Baosteel after Vale of Brazil reached a 65% increase with Japan's new iron ore. "Iron ore prices in the last year, the ' Chinese price ', why not this year?"　　"Xiangchun said that, subject to the external economic environment, taking into account the company's own operating conditions, China insists on continuing the negotiations is no suspense, but the future negotiations will be even more difficult."　　The decline is close to domestic miners ' profit and loss It is understood that China is the world's largest iron ore consumption, the last year, ore imports of up to 443.66 million tons, accounting for global iron ore exports of about 50%, this January-April imports of 188.46 million tons of iron ore, a year earlier than the same period increased 35.13 million tons, increasing 22.91% "The International iron ore market is obviously oversupply, import ore prices have a sharp downward trend, the risk of excessive imports of iron ore is significantly increased, should cause high concern."　　"According to the current situation of iron ore imports, Bingsheng, vice president of CISA, said. "Our country is already very dependent on foreign mines, if foreign miners occupy the Chinese market step after year, steel enterprises will be more and more weak in the future."　　"May 23, a large mining enterprise in Hebei Province, who declined to be named, told reporters at the third China Mining investment and financing and going to the Summit forum." "The initial agreement price of about 33% of the decline, and the current market situation, domestic miners will continue to be in the margins and loss margin." But as domestic equipment, technology and other production costs are high, the lower the price of iron ore, the procurement of domestic mining business profits will be worse.　　Said the person familiar with the matter. Followed by ironThe price of ore negotiations is becoming clearer, and the conflict between domestic steel companies and miners is intensifying. However, "to change the status of domestic mining enterprises, to go out is the most desirable solution now."　　"Zhang, director of the Sino-mining Fund, said the international economic situation shows that this is the best time for domestic mining companies to copy overseas." He introduced that the Sino-mining Joint fund will raise 10 billion yuan, focusing on the acquisition of mining-listed holding companies with great potential at home and abroad for high-quality mining resources and capital markets.