Steel market continues to slump China's iron ore index fell 22% in April

On the evening of January 2, according to the China Iron Ore Index compiled jointly by the China Iron and Steel Association and China Minmetals Chamber of Commerce, China's iron ore price index was 460.36 points at the end of December last year, which was 596.87 points earlier than the index (September 2011). In the first week, it dropped by more than 130 points, which was about 22%. As of the end of 2011, China's major port iron ore stocks reached 96.82 million tons, an increase of 32.2% over the same period of last year.

According to the China Iron and Steel Association, China's iron ore price index was 460.36 points at the end of December 2011, of which the domestic iron ore price index fell by 2.25% from the end of November last year, and the price index of imported iron ore decreased by 0.11 from the end of November last year. %. It is noteworthy that compared with the first week of September last year when the Chinese iron ore price index was being compiled, the index has fallen by 136 points, of which the price index for imported iron ore has fallen from 659.5 points to 504.72 points.

Yesterday, industry analysts told reporters that from the domestic side, the steel mills still did not have large-scale procurement behavior. They continued to use the strategy of using supplements and supplements. As the staged replenishment of charge stocks approached the end, the procurement requirements of steel mills gradually increased. It has been reduced and it is gradually entering the off-season construction period. It is expected that the lack of downstream demand for steel will last for a long time. Because of the high purchase cost in the previous period, the trader's iron ore price showed an upward trend in the previous period, and it was generally unwilling to cut prices. Market transactions regained stalemate.

Recently, it was reported that India's increase in export tariffs to 30% in the New Year or stimulate the market price this week has risen, but some analysts believe that if the steel market is still depressed, iron ore prices are difficult to make major breakthroughs.

Analyst Chen Kairu, an iron ore analyst at the business club’s iron and steel company, analyzes that the difficult situation of the iron and steel industry has kept the raw material iron ore down and running. At present, most steel mills are not optimistic about the market outlook. At present, the main consideration is to control the risk of raw material costs. It will not be easy to stock up too high inventory. Even if it is purchased, it is mainly based on a small amount of supplemental storage. Coupled with the current iron ore ports in major ports throughout the country, as of mid-December, the major ports of iron ore stocks amounted to more than 90 million tons, and the supply of iron ore far exceeded its demand. the amount.

Therefore, Chen Kai predicts that due to the steel market is not clearly better, the iron ore market is unlikely to leverage on the rise. Hu Yanping, an analyst at China United Steel, believes that considering that the steel market has not really rebounded completely, and the current iron ore prices are still high relative to steel prices, some companies are still on the verge of a loss and the production cost pressure is high. Iron ore within the narrow range of fluctuations, the medium-term will be turbulent upward.

From the multiple perspectives of domestic iron and steel production and steelmakers' purchasing mentality, the probability of ore prices breaking the earlier low (116 points) in the recent months is relatively small, and the narrow adjustment of ores between 130-140 points may be relatively large. The corresponding hot rolling costs are around RMB 4200-4300, and the rigid support is more obvious.

“At present, domestic crude steel production and raw material reserves of steel plants are already at the lowest level in the year, and there is limited room for further reduction of production in the later period. Therefore, the demand for raw materials will gradually increase. Once the consumption season starts, the demand for steel warehouses will recover. Prices have a higher probability of rebounding and rebounding. However, in January, the raw material market will continue to rely mainly on steel mills to properly make up the stocks and the prices will operate smoothly, the analysts predicted.