Iron ore supply and stable price requires comprehensive measures
Since the end of January this year, in response to the abnormal fluctuation of iron ore prices, the National Development and Reform Commission has successively introduced measures to increase market supervision and make every effort to ensure the stable operation of iron ore prices.
What is the current trend of iron ore prices?
How to further do a good job in ensuring the supply and price of iron ore?
'Crazy Stone' is under scrutiny
In response to the abnormal situation that the supply and demand of the iron ore market was generally stable and the port inventory continued to rise to a multi-year high, but the price still rose sharply, the Price Department of the National Development and Reform Commission and the Price Supervision and Competition Bureau of the State Administration of Market Supervision jointly organized the Port Association and some port enterprises to hold a meeting The special meeting will study the relevant work of greatly shortening the free storage period of iron ore for trading companies, increasing the cost of port hoarding, and preventing excessive hoarding, and guide port companies to urge iron ore trading companies to release excessive inventory and restore it to a reasonable level as soon as possible.
This round of iron ore regulation can be traced back to mid-November last year.
Driven by the increase in credit issuance by financial institutions and the concept of "guaranteed delivery" of real estate, the black department ushered in a trading atmosphere of "off-season but not weak" in winter, and upstream raw materials showed a general upward trend.
In a few months, the main iron ore contract has risen by more than 60%, and the wind of speculation has resumed.
On the eve of the Spring Festival holiday, the official Weibo of the National Development and Reform Commission announced that effective measures will be taken to strengthen the regulation and supervision of iron ore prices.
However, this first voice did not attract the attention of the market, and the main iron ore contract hit a new high.
On February 9, the Price Department of the National Development and Reform Commission and the Price Supervision and Competition Bureau of the State Administration for Market Regulation jointly interviewed relevant iron ore information companies, requesting the factual source of the information to be released, not to fabricate and publish false price information, and not to fabricate and spread price increases. Information, no price gouging.
At the same time, it clearly warned that relevant violations of laws and regulations will be hit and severely punished.
Iron ore fell 5.9%.
But on the next day, iron ore showed an upward trend again, and brushed a new high of 849.50 yuan per ton on the same day and night.
In this regard, the Price Department of the National Development and Reform Commission, the Price Supervision and Competition Bureau of the State Administration of Market Regulation, and the Futures Department of the China Securities Regulatory Commission jointly held a meeting to call on relevant state-owned enterprises to take the initiative to assume social responsibilities and help the government ensure supply and price stability.
After the market proved its determination to adjust and control, the iron ore futures disk continued to decline.
On February 17, the Price Department of the National Development and Reform Commission and the Price Supervision and Competition Bureau of the State Administration of Market Supervision went to Qingdao to conduct a joint supervision and investigation. They had a comprehensive understanding of the changes in iron ore inventory in Qingdao Port, and retrieved a list of companies with rapid inventory growth.
At the same time, some iron ore trading companies are required to release excessive inventories, restore them to a reasonable level as soon as possible, and provide details such as recent changes in iron ore inventories, specific time, quantity and price of buying and selling, and cooperate to verify whether there is hoarding, Violations such as price gouging.
On February 23, the National Development and Reform Commission interviewed the port to study the plan to improve the iron ore turnover efficiency of the port and prevent the accumulation of iron ore.
Since March, iron ore futures have been dominated by shocks, with a correction from the highest point.
The regulation of functional departments has achieved phased results.
The game between internal and external supply and demand intensifies
"The country's determination and efforts to limit iron and steel production and strengthen the supply guarantee of iron resources are unprecedented." An industry expert told reporters that although supply and demand determine the price direction, if the actual supply and demand does not change, the futures spot will increase greatly, indicating the need for Curb speculation and increase expectation management.
my country's increase in iron ore price regulation, will it react to the international market?
Experts think that's for sure.
Because the target of the iron ore swap and the Platts index is the CIF price of iron ore in Qingdao Port, China.
"There is no international price for iron ore, and the world uses one price, the Platts index - the CIF price of 62% iron ore at Qingdao Port in China. As long as Europe, the United States, Japan and South Korea import iron ore, they all use this." One A person from China Iron and Steel Association told reporters.
Industry insiders call for iron ore regulation to grasp the status and advantages of my country as the largest buyer of iron ore, regulate and guide domestic enterprises to reasonably participate in Platts quotations, reasonably carry out overseas futures and spot transactions, and actively guide and encourage enterprises to use domestic futures. Price to set prices, improve the coverage and accuracy of supervision.
Although there is still some uncertainty about the strength and pace of steel production control, factors such as slowing downstream demand and scrap steel substitution must also be considered.
In this regard, Guo Chaohui, chief analyst of CICC's commodity research, believes that the decline in domestic hot metal production this year is still a high probability event.
Globally, iron ore demand is expected to remain at the same level as last year.
However, on the supply side, the profit margins of mainstream mines are considerable and the supply elasticity is low. If the capacity replacement project proceeds smoothly, the shipment volume will continue to grow. It is expected that the supply and demand of iron ore will become more relaxed this year, and the price of iron ore will not rebound significantly. Base.
At the same time, with the gradual loosening of the supply of scrap steel and the liberalization of the import of recycled steel raw materials, it is expected that the consumption of scrap steel will continue to increase, forming a substitute for iron ore.
Establish an iron ore supply guarantee system
In 2020, my country's iron ore imports will reach 1.17 billion tons. It is estimated that China's dependence on imported iron ore exceeds 80%.
Objectively speaking, in the current international iron ore pricing mechanism, my country's pricing influence needs to be further improved.
The China Iron and Steel Association has repeatedly stated that the iron ore pricing mechanism is unreasonable. "In the context of building a new development pattern, it is urgent to strengthen the guarantee of iron ore resources and improve the iron ore pricing mechanism."
In this regard, Li Xinchuang, Secretary of the Party Committee and Chief Engineer of the Metallurgical Industry Planning and Research Institute, said that the work of ensuring the supply and price of iron ore needs to do a good job of "system engineering" and can learn from the existing relevant experience.
First of all, using the "development import" model, on the basis of signing a long-term purchase guarantee agreement, through investment in the development of overseas mineral resources to obtain stable imported resources.
There are two forms of investing in equity mines: one is to hold equity by becoming a shareholder of a resource company; the other is to establish a joint venture with a resource company for development projects and hold equity.
By directly or indirectly participating in the development of overseas iron ore mines, the amount of equity ore obtained each year can cover the import demand to the greatest extent.
Second, establish an iron ore reserve system.
For example, Japan's strategic resource reserves began in 1983. The reserves of minerals include energy minerals such as oil and coal, and metal minerals such as iron ore, nickel and molybdenum.
Japan implements strategic reserves of iron ore, mainly shared by the government and private enterprises.
Once the market price fluctuates significantly and the price rises too much, the government will use the reserves to adjust.
At the same time, Japan has also formulated a series of legal systems related to its iron ore strategy, with particular emphasis on the protection of the overseas mineral legal system.
Finally, in terms of shipping support, while deploying global iron ore resources, it actively deploys the iron ore shipping market.
Encourage shipping enterprises to seek economies of scale through intensive integration, and develop win-win development with financial institutions and mining units.
By signing long-term transportation contracts with iron and steel enterprises, on the one hand, it ensures the stable income of the shipping company and avoids risks, and on the other hand, it guarantees the transportation cost of the iron and steel enterprises.
Li Xinchuang believes that under the established global iron ore layout, in the face of rising iron ore prices and huge annual import demand, it is necessary to seek new ideas on the existing basis to optimize overseas resource security capabilities, investment forms It can be more flexible, gradually optimize the structure and layout of overseas investment, participate in the development of overseas resources in a standardized and orderly manner, and enhance the global strategic capacity of mineral resources.
At present, my country has neither relevant laws and regulations nor practical experience in iron ore reserves.
It can be considered to gradually build a mineral resource reserve system with the joint participation of the state and enterprises and the combination of product reserve and resource reserve.
In addition, through technological innovation, the added value of steel products can be increased, the profit margin can be increased, and the adverse impact of iron ore price increases can be digested; through technical support, the utilization rate of iron ore can be improved, resources can be saved, the demand for iron ore can be reduced, and the impact on iron ore can be reduced. Dependence on foreign iron ore resources.
Zhu Huichun