Under the pressure of the three giants pushing up the spot price of iron ore, the Chinese have begun to accelerate the layout of the negotiations. Sources disclosed to the "Economic Information Daily" that the new supplement will be introduced in the near future in response to the introduction of the "Convention on the Self-Discipline of the Iron Ore Trade Order of the Iron and Steel Industry (hereinafter referred to as the "Convention") in February this year. It is reported that this supplement will have more stringent and clear assessment and implementation standards for the import order of iron ore, including 70 steel enterprises and 42 traders who are qualified for import.
This move will undoubtedly show that China’s efforts to rectify the order in the domestic market are steadily increasing. While controlling excessive imports and preventing the collapse of antimony ore, it will also help improve our position in the iron ore negotiations.
What will the "Convention" supplement?
Although no specific time was announced, the above-mentioned sources told reporters that the supplementary part of the “Convention†was jointly studied and discussed by the China Iron and Steel Association and Minmetals Chamber of Commerce and other departments, and a general meeting will be held later. Once the member company voted to pass the plan, it will be implemented first in member units.
The source said that the above supplement will comprehensively regulate the import of qualified companies. On the one hand, it will focus on reviewing whether production capacity and projects of production companies are in line with national industrial policies and prevent the flow of imported ore to backward production capacity. At the same time, more stringent standards will be set for environmental protection and safety.
On the other hand, for qualified trading companies, they mainly set the threshold for funding, scale, and services. Whether or not it has the capital scale, advantages of ore import sources and professional service awareness have become the focus of the assessment. Among the import scales, the previously stipulated annual import volume of 700,000 tons will also increase. In addition, the iron ore import agency system will be strictly enforced to prevent production enterprises and trading companies from carrying out counterfeit ore mining operations for profits.
Many reporters learned that the supplementary part will refer to and cooperate with the national industrial policy and the relevant government departments will also strictly supervise and review the company according to the detailed rules. Once there is no rectification after the notification, the company will be ordered to stop production and cancel its import qualifications.
Helps Chinese iron ore negotiations
Xu Xiangchun, director of consulting of my steel network, said in an interview with reporters that the introduction of the above supplementary part will help us to rectify the market order and establish a more fair trading environment for the domestic iron ore market. More importantly, it is possible to rationalize demand from the inside and prevent over-imports of iron ore and avoid the three major giants secretly manipulating the iron ore market order, thereby enhancing China's right to speak in the negotiations.
He believes that in the sensitive period of iron ore negotiations, this seems to be a signal. Based on the industrial policies of the steel industry, relevant departments in the later period may further strengthen their efforts to rectify the iron ore market.
"Because the supplement is still issued in the form of 'industry self-regulation', the industry may be weakly bound." Du Wei, analyst at Uranium Minerals Channel, said: "From this point of view, whether it can be implemented as expected? The effect may remain to be observed.†In response, she suggested that relevant government departments should introduce supporting policies, especially in terms of supervision and review, and should establish a set of effective management mechanisms to promote the rectification of the domestic iron ore market order.
Du Wei believes that the implementation of the supplementary clause will take a long time. While rectifying the qualified companies, for some steel mills that do not have import qualifications, if the production capacity, scale, and environmental protection are all in line with the conditions, they can approve their import qualifications in an appropriate amount. In addition, she said that multi-stakeholder considerations should be considered. Special consideration should be given to private small and medium-sized steel mills that are not involved in long-term negotiations. In addition to implementing the iron ore import agency system, the actual interests of small and medium steel mills should be balanced to avoid market chaos. situation.
Spot market chaos foreign mines opportunity to create momentum
Because there are two markets and two kinds of prices in the Chinese market, the speculative behavior caused by spreads, resulting in the false prosperity of excessive import of iron ore and the sharp fluctuations in the spot market price, the disorderly market order makes the Chinese negotiation very passive.
At present, although the 2010 annual iron ore price negotiations have not yet officially started, the mine has begun to intensify its momentum, rendering iron ore tight supply and demand situation. Customs statistics show that China imported 45.47 million tons of iron ore in October, which is 19.08 million tons less than that in September, a drop of 30%, a new low in eight months, and a domestic production of 83.88 million tons of iron ore (origin). Declined by 2% in September.
Based on this calculation, China’s domestic and imported iron ore supplies totaled 72.31 million tons in October, compared with 78.85 million tons in demand, and the gap exceeded 6.5 million tons. Affected by this, port stocks are also continuing to decline. It is understood that the inventory of iron ore in 19 ports this week totaled 66.2 million tons, which is 760,000 tons less than last week's statistics. This is the fourth consecutive week that the Hong Kong deposit statistics have dropped, which is 5 million tons less than a month ago, and it is also 8 New lows since the month.
At the same time, the mines are constantly pushing up the price of ocean freight. The Baltic dry bulk freight index closed at 4,661 on November 19, up 707 points or 17.88% from the previous week. Among them, freight rates from Brazil to China were US$46.546 per ton, and Western Australia to China was US$23.264 per ton, up 8.4% and 23.5% respectively from last week.
The iron ore market continues to rise steadily under the influence of many factors. According to data from United Metals, spot iron ore prices in the spot market in India reached CIF105/ton on November 20, up 29.6% from two months ago, far higher than the 2009 Nippon Steel and Rio Tinto reached the starting price.
It is understood that for the outcome of the negotiations, currently many organizations generally hold the view of “price increaseâ€. UBS predicts that the long-term contract price in 2010 will increase by 20%, in addition to other research institutions, the highest predicted increase of 30%.
Various facts have shown that for the Chinese side, which has repeatedly been at a disadvantage in the negotiations, it is imperative to rectify the iron ore market order.
This move will undoubtedly show that China’s efforts to rectify the order in the domestic market are steadily increasing. While controlling excessive imports and preventing the collapse of antimony ore, it will also help improve our position in the iron ore negotiations.
What will the "Convention" supplement?
Although no specific time was announced, the above-mentioned sources told reporters that the supplementary part of the “Convention†was jointly studied and discussed by the China Iron and Steel Association and Minmetals Chamber of Commerce and other departments, and a general meeting will be held later. Once the member company voted to pass the plan, it will be implemented first in member units.
The source said that the above supplement will comprehensively regulate the import of qualified companies. On the one hand, it will focus on reviewing whether production capacity and projects of production companies are in line with national industrial policies and prevent the flow of imported ore to backward production capacity. At the same time, more stringent standards will be set for environmental protection and safety.
On the other hand, for qualified trading companies, they mainly set the threshold for funding, scale, and services. Whether or not it has the capital scale, advantages of ore import sources and professional service awareness have become the focus of the assessment. Among the import scales, the previously stipulated annual import volume of 700,000 tons will also increase. In addition, the iron ore import agency system will be strictly enforced to prevent production enterprises and trading companies from carrying out counterfeit ore mining operations for profits.
Many reporters learned that the supplementary part will refer to and cooperate with the national industrial policy and the relevant government departments will also strictly supervise and review the company according to the detailed rules. Once there is no rectification after the notification, the company will be ordered to stop production and cancel its import qualifications.
Helps Chinese iron ore negotiations
Xu Xiangchun, director of consulting of my steel network, said in an interview with reporters that the introduction of the above supplementary part will help us to rectify the market order and establish a more fair trading environment for the domestic iron ore market. More importantly, it is possible to rationalize demand from the inside and prevent over-imports of iron ore and avoid the three major giants secretly manipulating the iron ore market order, thereby enhancing China's right to speak in the negotiations.
He believes that in the sensitive period of iron ore negotiations, this seems to be a signal. Based on the industrial policies of the steel industry, relevant departments in the later period may further strengthen their efforts to rectify the iron ore market.
"Because the supplement is still issued in the form of 'industry self-regulation', the industry may be weakly bound." Du Wei, analyst at Uranium Minerals Channel, said: "From this point of view, whether it can be implemented as expected? The effect may remain to be observed.†In response, she suggested that relevant government departments should introduce supporting policies, especially in terms of supervision and review, and should establish a set of effective management mechanisms to promote the rectification of the domestic iron ore market order.
Du Wei believes that the implementation of the supplementary clause will take a long time. While rectifying the qualified companies, for some steel mills that do not have import qualifications, if the production capacity, scale, and environmental protection are all in line with the conditions, they can approve their import qualifications in an appropriate amount. In addition, she said that multi-stakeholder considerations should be considered. Special consideration should be given to private small and medium-sized steel mills that are not involved in long-term negotiations. In addition to implementing the iron ore import agency system, the actual interests of small and medium steel mills should be balanced to avoid market chaos. situation.
Spot market chaos foreign mines opportunity to create momentum
Because there are two markets and two kinds of prices in the Chinese market, the speculative behavior caused by spreads, resulting in the false prosperity of excessive import of iron ore and the sharp fluctuations in the spot market price, the disorderly market order makes the Chinese negotiation very passive.
At present, although the 2010 annual iron ore price negotiations have not yet officially started, the mine has begun to intensify its momentum, rendering iron ore tight supply and demand situation. Customs statistics show that China imported 45.47 million tons of iron ore in October, which is 19.08 million tons less than that in September, a drop of 30%, a new low in eight months, and a domestic production of 83.88 million tons of iron ore (origin). Declined by 2% in September.
Based on this calculation, China’s domestic and imported iron ore supplies totaled 72.31 million tons in October, compared with 78.85 million tons in demand, and the gap exceeded 6.5 million tons. Affected by this, port stocks are also continuing to decline. It is understood that the inventory of iron ore in 19 ports this week totaled 66.2 million tons, which is 760,000 tons less than last week's statistics. This is the fourth consecutive week that the Hong Kong deposit statistics have dropped, which is 5 million tons less than a month ago, and it is also 8 New lows since the month.
At the same time, the mines are constantly pushing up the price of ocean freight. The Baltic dry bulk freight index closed at 4,661 on November 19, up 707 points or 17.88% from the previous week. Among them, freight rates from Brazil to China were US$46.546 per ton, and Western Australia to China was US$23.264 per ton, up 8.4% and 23.5% respectively from last week.
The iron ore market continues to rise steadily under the influence of many factors. According to data from United Metals, spot iron ore prices in the spot market in India reached CIF105/ton on November 20, up 29.6% from two months ago, far higher than the 2009 Nippon Steel and Rio Tinto reached the starting price.
It is understood that for the outcome of the negotiations, currently many organizations generally hold the view of “price increaseâ€. UBS predicts that the long-term contract price in 2010 will increase by 20%, in addition to other research institutions, the highest predicted increase of 30%.
Various facts have shown that for the Chinese side, which has repeatedly been at a disadvantage in the negotiations, it is imperative to rectify the iron ore market order.