The break of the iron ore financing chain caused huge inventories to cap

by:ChangZeng     2021-02-23
The steel market stocks are overwhelming, and Q345B steel plate also has new developments. The bear market in iron ore has been going on for several years now. According to the calculation of the Platts index, since February 2011, iron ore quotations have always been at a high level and vibrated. In terms of average price, the average price of iron ore reached a historical peak of US$169/ton in 2011, and then the quotation continued to decline slightly. The average price in 2012 was US$130/ton, while the average price in 2013 was US$136/ton. In this regard, South China Futures Hu Xiaodong stated that from the Platts Index, iron ore quotations have gradually declined since they peaked in 2011. This also reflects to a large extent the domestic interest in China’s 4 trillion yuan investment. The steel needs to be added from explosive addition to the trend of steady addition, but from 2010 to 2013, the total amount of iron ore needed every year is still continuously added. The industry generally believes that although Chaori’s default is the first default in China’s bond market, the myth of “zero default” in bond markets has also been broken. The bond market faces a dangerous revaluation and the market’s anxiety has risen sharply. This has occurred for bulk products. Due to the negative impact, iron ore has touched many financing transactions, and it is also a bulk product imported in huge quantities. Of course, there is no exception.  If the bulk of the product drops sharply, perhaps the financiers themselves have not properly preserved their value in this process, the capital chain must be questionable. Since most iron ore transactions are not hedged, once the quotation falls too much, many spot dealers will stand firm. Iron ore does not have an international market future like copper. The only way to reduce this huge inventory is to make progressive purchases by domestic steel mills. However, at that time the possibility of steel mills making substantial progress in acquisitions was extremely low.   In fact, for traders, the successive declines in ore prices have impacted traders’ enthusiasm for stockpiling, and also caused them to suffer greater losses. In the future, the center of gravity of ore prices will continue to decline or the profit space of traders will continue to narrow. At that time, it seemed that the iron ore falling was a fait accompli, but the kinetic energy of further falling would be significantly slowed compared to before. The output value of crude steel has risen steadily since late February, which supported the cost of iron ore at that time. On the supply side, the accelerated release of the production capacity of the world's four major mining giants is also an important factor leading to the gradual reversal of supply and demand. According to the expansion plans of the four major mineral depositors, it is estimated that China’s imported iron ore will add 100 million tons in 2014, an increase of about 10%, while the Iron and Association estimates that China’s steel output value will increase by 3.1% in 2014. Iron ore supply More than the demand, the contradiction between supply and demand has increased and the price of ore is under pressure.   At that time, the stock of iron ore in domestic ports was nearly 110 million tons, reaching a historical high. In January of this year, China’s total imports of iron ore and concentrates reached a record of 86.83 million tons, an increase of 18.33% month-on-month and 32.48% year-on-year. The seemingly arrogant import situation, at the moment when the threaded and hot-rolled spot quotations are rewriting historically low levels, market investors believe that iron ore is particularly necessary to be short. Xiang Nan, an iron ore analyst at Haizheng Futures, believes that at the back of the price adjustment, the underlying cause is the mismatch of supply and demand caused by the different expansion cycles of the mining and steel industries. The cycle of capacity expansion is divided into the investment cycle and the construction cycle. It does not match the investment cycle and construction cycle of steel. The investment cycle of iron ore lags significantly behind the investment cycle of steel. Usually, after the expansion of steel production capacity, the expansion of iron ore production capacity begins, and the construction cycle of iron ore is good at the construction cycle of steel. It is precisely because of the dislocation of the two capital contributions and production cycles that when steel production capacity is expanded, iron ore supply is in short supply, ore prices are rising, steel companies’ surpluses are reduced, and the investment momentum of the steel products industry is beginning to weaken, but the previous expansion of iron ore production capacity has begun. The release resulted in an oversupply of iron ore, which was exactly the environment faced by iron ore commercial establishments at that time. For more details, please visit http://www.q345bj.com/
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