Lejiang: Three quarter is the hardest time in the steel industry

June 8, Baosteel Group chairman Lejiang said the three quarter will be the most difficult period in China's steel industry this year, mainly because iron ore prices will reach peak, and lower demand in the downstream sector.　　He made the remarks during the second Global Green economic summit in Shanghai. Lejiang said: "The steel industry three quarter days will be more difficult, some steel companies will reduce production." "For the three miners ' quarterly price, he also said," according to their pricing rules, I predict the highest price this year will appear in the third quarter.　　"My Steel Network recently released analysis shows that because of the two-way extrusion of mine price and steel price, this year three quarters estimate is the most difficult time of domestic steel mills, when the steel mill's" overhaul production "will tend to be obvious.　　June 4, Baosteel announced a cut in July steel prices, some of the car board fell as much as 1000 yuan/ton, other major plate varieties to reduce the price of 500 yuan/ton, this is the first time this year, Baosteel to reduce prices, the sharp price also exceeded the industry's expectations.　　Lejiang said that the price of upstream iron ore rose, and downstream automotive industry demand for steel weak, up and down, Baosteel had to lower prices, the next three quarters of Baosteel's profits will inevitably be affected. Wanguo June 7, the latest research reported that, although the current 3-quarter iron ore price is undecided, but it can be clear that Baosteel's price reduction will greatly affect its third-quarter earnings, so Baosteel's shares in 2010, 2011 performance from 0.75 yuan, 0.86 yuan to 0.60 yuan, 0.71 yuan. In addition, Baosteel's main products of the ton of steel profits have also been reduced.　　Hot-rolled carbon steel coil profit from 827 yuan/ton reduced to 622 yuan/ton, cold-rolled carbon steel plate volume from 1264 yuan/ton down to 984 yuan/ton.　　According to Australian media June 7, BHP Billiton and Rio Tinto have informed the Japanese steel companies, will be on the basis of the two-quarter iron ore price increase of 23%, which will raise the price of iron ore to 147 U.S. dollars/ton, for the same period in 2009 140%. In the first quarter of this year, China's imports of iron ore price is 110 U.S. dollars/ton, in accordance with the Convention, with the introduction of three mining companies, the price of spot ore will also rise.　　For the moment, on the one hand, spot ore prices began to decline in late April, as of June 8, Qingdao port 63.5% content of the Indian ore powder CIF price of 150-152 U.S. dollars/ton. For if the spot price compares the price of the agreement appears to be upside down, Baosteel will not consider the spot market, Lejiang said: "Some small steel mills out of their own profitability in the three quarter tend to buy spot iron ore, because the spot price may be lower than the agreed price, and Baosteel will not, but we will be to the three major mine pricing mechanism to question." ”