China Steel Industry Association said on Thursday special analyst Luo, 2011, China Steel Association will conduct a national iron ore, coal and other strategic resources and distribution system of reserves, good iron ore imports and import flows of agency management.
CISA has just stepped down from office, executive vice president Luo and recommendation, the State should require foreign exchange reserves into industrial reserves of iron ore and other strategic resources, the move is beneficial to the industry.
“China has large foreign exchange reserves, the resources industry needs to be turned into reserves, in particular, is an important strategic resource reserves,” he said, “should be referred to the strategic resources of iron ore to understand the deal with a high degree.”
Luo also said the Japanese Nippon Steel and Sumitomo Metal possible merger, and will not lead to monopoly of the Chinese steel industry concerns.
In his view, from a global perspective, the further consolidation and reorganization among the steel prices are a big trend, if the Nippon Steel and Sumitomo will be formed after the Arcelor Mittal merger (MT.N: Quote), the world’s second largest The steel companies, while China does not rule out crude steel production capacity of more than 6,000 tons and steel companies, the global steel industry restructuring is an unstoppable trend is the result of market development, is the adverse effects of iron and steel enterprises should Baotuan and external shocks response.
Luo also pointed out that in 2011 China’s steel industry will actively promote the Zhanjiang, Fangchenggang two coastal steel base construction, iron and steel enterprises to accelerate cross-regional, cross-ownership mergers and consolidation and reorganization, active support for national policy and support to improve the industry concentration of industry degree has taken greater strides.
Fluctuations in steel prices will be upwards, “mine price is astronomical,”
Luo said that domestic steel prices this year will show a volatility adjusted upward trend, and the current iron ore CIF price of imports has been about 200 U.S. dollars per ton at the highest price level.
Global demand for new iron ore over the past few years, mainly from China, while China’s future steel demand stabilized, and a substantial amount of Chinese-made mineral growth trend is expected to maintain, which will lead to global iron ore supply and demand balance.
“Personal opinion, close to 200 dollars (iron ore) price is the highest price level is astronomical.” Luo said. He became, iron ore prices rising costs of iron and steel enterprises have become a huge burden, also the formation of the impact of the steel industry, resulting in significant losses.
Australian mining giants – BHP Billiton (BHP.AX: Quote) (BLT.L: Quote) proposed earlier by the FOB price of iron ore per ton increased to $ 168 $ 155, this measure, China imported iron ore will reach nearly $ 200 per ton CIF.
Iron ore and coking coal last year, so the rising cost of raw fuel procurement, only an iron ore imports in 2010, China’s steel industry to pay more for iron ore prices and more than 1,900 billion yuan, equivalent to last year medium-sized steel enterprises, more than double annual profit. and medium-sized steel enterprises in China last year, the average sales profit rate of only 2.91%, far below the national average profit level of industrial sectors.
Luo also said that China’s steel industry in 2011 will strive to establish a stable raw material and fuel resources, security system, adhere to the “going out” strategy, increasing investment in overseas iron mines, development, shares, further increasing the proportion of overseas mining interests.
China iron and steel companies, including Baosteel, Anshan Steel and Wuhan Iron and Steel were all seeking to develop iron ore resources overseas, and even set up factories overseas to reduce its three major global suppliers – BHP Billiton, Rio Tinto and CVRD’s iron ore supply dependence.