banner

The cost of tinplate material has increased recently

Dec 19 , 2020
A few days ago, a reporter from the China Economic Times learned from the China Iron and Steel Association that the China Iron and Steel Association has successively communicated with international mining giants regarding the recent rapid increase in iron ore market prices. Due to the skyrocketing price of upstream raw materials, the development situation of my country's steel industry is not optimistic, and it is inevitable that the profits of steel enterprises will be eroded by the rapidly rising costs.

It is understood that on the morning of December 15th, Luo Tiejun, Vice Chairman of the China Iron and Steel Association, and Simon Farry, Vice President of Rio Tinto Iron Ore Marketing, and Chen Sheng, General Manager of Iron Ore China, held a video conference. The iron ore market prices rose rapidly, the pricing mechanism was improved, and Rio Tinto's production and sales were exchanged.

Luo Tiejun said that according to reports, Rio Tinto has recently made continuous high-premium transactions through the platform, and the increase has exceeded the company's expectations. The existing pricing mechanism is unreasonable. Both the supplier and the demander must study and establish a new pricing mechanism instead of following the current long-term disadvantage for upstream and downstream. Pricing mechanism for healthy development. Rio Tinto responded that the current demand for iron ore is relatively strong and understands the challenges that price instability brings to end users. As the world's largest iron ore producer, Rio Tinto is willing to work with the demand side to optimize and improve the existing pricing mechanism. At the same time, in response to the news that the Australian Parliamentary Committee recommended Western Australia to strengthen iron ore mining management in order to protect the heritage sites of indigenous people, Rio Tinto emphasized that the proposal will not affect current projects under construction. , If the proposal is approved, it will increase the approval process for new projects in the future, but it is not the “suspension of all iron ore mining projects” as interpreted by some media.

   On the afternoon of December 10, the China Iron and Steel Association organized China's Baowu, Shagang, Anshan Iron and Steel, Shougang, Hegang, Valin Steel, and Jianlong iron and steel companies to hold an iron ore market symposium to discuss recent market operations and other issues. The participating companies agreed that the current rise in iron ore prices has deviated from the fundamentals of supply and demand, and has greatly exceeded the expectations of steel mills. There are obvious signs of capital speculation.

   Currently, the iron ore market pricing mechanism has failed. Iron and steel companies have unanimously called on the State Administration of Market Supervision and the China Securities Regulatory Commission to take effective measures to intervene in investigations in a timely manner and severely crack down on possible violations of laws and regulations in accordance with the law. The meeting believed that the sharp increase in iron ore prices has eroded the hard-won economic gains made by my country’s steel companies in response to the new crown pneumonia epidemic, and has greatly exceeded the industry’s expectations for price increases. It is not conducive to the stability of the industrial chain and supply chain, and it has also severely weakened. The market competitiveness of my country's steel industry.

   Since December, iron ore prices have continued to soar. "According to estimates, the price of iron ore has risen by 60% since the beginning of this year, but the price of steel has risen by less than 10%. The price increase of iron ore is unreasonable and unsustainable." Vice President and Vice President of China Iron and Steel Association Secretary-General Qu Xiuli said at the 2020 China Steel Technology and Economic High-end Forum on December 12. Qu Xiuli said that this is not only due to the increase in demand, but also factors such as foreign monopoly and capital market speculation have also contributed to the increase in prices. Iron ore prices continue to rise at a high level, which has a huge impact on the industry, which has greatly exceeded the industry's expectations for price increases. It is expected that the loss of the steel industry will expand in the later period, which is not conducive to the stability of the industrial chain and supply chain.

In an interview with reporters a few days ago, Luo Tiejun also said that from the situation of the China Iron and Steel Association, the recent price of imported iron ore has risen sharply and deviated from the fundamentals of supply and demand. There are abnormal biddings of traders to boost the index rise, and the futures market is approaching the delivery month. In order to create market tension, they called on relevant regulatory authorities to intervene as soon as possible.

  The recent iron ore futures have been gaining sharply, and the main contract price hit a record high since the iron ore futures went public in 2013. Since November this year, the price of iron ore has entered a period of accelerated growth, and the main contract price once surpassed RMB 1042 per ton. The increase during the year has exceeded 102 percentage points, which has doubled.

On December 10th, Luo Tiejun held a video conference with Rod Dukino, vice president of global marketing of BHP Billiton, Rohan Roberts, senior manager of global marketing of iron ore, and Wang Yuekui, president of China, to discuss the production and sales of BHP Billiton iron ore and pricing The mechanism and the recent sharp rise in ore prices were discussed. According to BHP Billiton, it is expected that production in the new fiscal year starting in July will remain strong, and output will reach the upper limit of the guidance output (276 million-286 million tons). Regarding the recent market concern about the impact of Western Australia’s climate on shipments, BHP Billiton stated that it has no impact on the monthly shipment volume and will maintain the original planned level. Luo Tiejun asked about the recent increase in the price of iron ore by US$7.5 per ton in a single day. BHP Billiton explained and explained its willingness to strengthen communication and exchanges with the Iron and Steel Association to jointly promote the openness and transparency of the iron ore market.

   In an interview with reporters, Li Xinchuang, secretary of the Party Committee of the Metallurgical Industry Planning and Research Institute, believes that the price of iron ore is skyrocketing because of the tight supply and demand. Domestically, China’s crude steel production grew too fast from January to October this year, reaching 870 million tons, and it is expected to reach 1.05 billion tons for the whole year, accounting for nearly 60% of the global share. Moreover, steel production in other countries is also recovering after October , This will definitely boost iron ore demand. At the same time, in terms of iron ore supply, the output of Vale and FMG iron ore not only did not rise, but declined, resulting in tight supply and a contradiction between supply and demand. Judging from the current supply and demand and price changes, the excessively rapid growth of iron ore prices is extremely abnormal. The relationship between supply and demand has been imbalanced, and there is a lot of risk and speculation.

For the steel companies themselves, how to deal with the increasing cost pressures such as the increase in iron ore prices, Qu Xiuli believes that steel companies should improve the quality and efficiency of operation, effectively control the release of production capacity, increase the added value of products, and better satisfy downstream industries. Changes in demand. The system-wide benchmarking is conducted in all directions, and efforts are made to reduce costs and increase efficiency. Strengthen the construction of upstream and downstream industrial chains, and improve the ability to guarantee resources and energy.



click here to leave a message

Leave A Message
If you are interested in our products and want to know more details,please leave a message here,we will reply you as soon as we can.

Home

Products

About

contact