China's iron ore monthly imports reached a new high, difficult to change long-term supply and demand tend to loose

China's iron ore monthly imports are “unexpected” and the new high is difficult to change. Long-term supply and demand tends to be loose. “Chinese iron ore imports reached a record high in January. This is really unexpected. There has not been any major change in the market.” After learning the latest data from the customs, Wang Jianhua, a researcher at China's largest steel information agency, "My Steel", exclaimed to reporters on the 15th.   According to the latest data released by the General Administration of Customs, China imported 68.97 million tons of iron ore in January this year, an increase of 10.89 million tons from December last year, an increase of 47.9%. At the same time, the spot price of imported iron ore is also approaching an all-time high, and the price of the 63.5% grade Indian powder mine has exceeded $195 per ton. Some analysts said that considering the current relatively low shipping prices, the spot price of iron ore has actually hit a record high. The “new high” data surrounding the ore creates the impression that “supply and demand is tight”. However, many industry insiders in the steel industry chain, including the world's major mining companies, believe that from the overall trend, the “tightest time” of the global iron ore market is passing, and will gradually transition from “tight balance” to Relatively loose state. A president of a major Chinese mining company in the world recently told reporters that the mine price has been running at a high level for many years and will attract more capital to the mining industry. The new supply capacity of iron ore will be formed. As long as the emerging markets maintain a steady development and there is no “unexpected blowout demand”, it can be said that the “tightest time” of the ore market has gradually passed. Xu Lejiang, chairman of China Baosteel Group, also believes that the global iron ore is “never lacking” in terms of the quantity of resources. The imbalance between supply and demand is only a period of time. With the entry of new investment, changes in supply and demand are coming. For the “new high” data of ore in January, many analysts are “specific analysis”. Senior iron ore analysts once said to reporters that there were some "short-term special circumstances" in January that could not be ignored. More than 60% of the ore purchases of Chinese steel mills come from long-term supply agreements. There is an implementation problem of annual purchases at the end of the year, and the global ore quarter price in the last quarter of last year is at a low relative to the spot price. Some are also reasonable." In addition, the import of ore in the early period last year was relatively small, and it was normal to make up some stocks later. The combination of multiple short-term factors makes intuitive data seem “scareful” and is not caused by changes in the overall supply-demand relationship in the market. According to Zeng Jiesheng’s estimate, “the import volume of ore in February will definitely come down and it is unlikely to continue to exceed 60 million tons”. In 2009, China imported 628 million tons of iron ore and imported 618 million tons in 2010. “2010 is the first time that China’s iron ore imports have fallen year-on-year in the past 10 years.” This shows that the purchasing flexibility of Chinese steel mills has been increasing. It is normal to see fluctuations between the months. "There is not much regularity in the short-term factors." The key is to grasp the long-term trend. Some insiders have noticed that in the context of global inflation expectations, commodities including iron ore are most likely to become the “bearers” of the market's early game, when short-term factors are the easiest to cover long-term trends. Some market participants “discriminate the direction”. Researcher Wang Jianhua said that the recent operation of China's steel industry has not changed significantly. The ore market in front of it has reached new heights. It is worthwhile to increase the intensity of monitoring and research. It should be clear about the sources and ways of importing iron ore during this period. And the flow, "strictly distinguish the boundary between short-term factors and long-term trends" to avoid the "amplification effect" of short-term data. Previously, Luo Tiejun, deputy director of the Raw Materials Division of the Ministry of Industry and Information Technology of China, publicly stated in Shanghai that the Chinese steel industry is entering a track of low growth and low profit. In 2011 , China's steel industry will have an increase in production and consumption. "But the magnitude is unlikely to be too large." The steel industry may have reached a phased "top shock zone." In 2010, the average profit margin of China's industrial industries was 6%, and the steel industry was only 3.5%, “the lowest among all industries”. This situation in the steel industry does not support the “quantity and price increase” of the front-end mining industry. Researchers at Baosteel also believe that China's steel industry is likely to enter a “difficult period” of two squeezes, and the interests of the industrial chain are too biased towards the upstream mining industry, which is unsustainable. Analysts in the market have even had "angry emotions" when evaluating the current spot price of minerals that are currently heading to historical highs. Sheng Zhicheng, the information director of China's representative steel spot trading platform “Xiben Shinkansen”, said, “The price of iron ore has been gradually detached from supply and demand, and the price has been boosted by speculation and monopoly pricing.” China's spot steel prices are pushing up with the price of minerals, and the price of construction steel once again broke through the 5,000 mark. This is called the "chain price test" by the industry. Sheng Zhicheng said that there is instability and uncertainty in steel demand. Once high steel prices are broken, "the only thing left in China is high mine prices, low steel prices and lower profits of steel mills." At this moment, it is particularly important to grasp the long-term trend of “the high-speed development period of the steel industry and the tightest period of the ore market has passed”.

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