Iron ore prices are soaring steel prices drastically shrinking profits - the price of iron ore, ore mining - iron and steel industry

Iron ore prices are soaring steel prices drastically shrinking profits - the price of iron ore

, ore mining - iron and steel industry

Australia's annual iron ore negotiations on long-term contracts entered a "very" time, contributed to China and Rio Tinto "new" price, yet long-term agreement with Australia iron ore prices continue to "climb" the cost of iron and steel enterprises have also continued to increase. Analysts pointed out that this is also the cost of downstream industries will be directly affected.

"Threatened" under the compromise?

In accordance with the practice and the early years to the contract, each year on April 1, iron ore producers and steel producers of the new year should be long-term iron ore price agreement, when the failure to reach a new price negotiations could extension of supply-side continue to supply iron ore prices last year, reached an agreement "Duotuishaobu."

It is worth noting that in the contract with the mining enterprises, there are a "deadline" of the agreement, that is, after this period, either party has the right to unilaterally terminate the contract, and stop delivery or collection goods. China Steel Industry Association, an insider said yesterday that the Chinese steel mills for most of this period are basically on June 30, and the Japanese steel mills in the contract deadline is September 30 general.

Was entered in June, the number of mining enterprises Australia "threatened" if the "Doomsday" has not reached an agreement after the two sides of supply and demand, prices will move higher iron ore spot market sales. Prior to this, BHP Billiton is the establishment of the market Iron ore price Stock indices suggested that the future of the annual negotiations were "spot index" instead.

According to report, and determine to some extent a higher price than the long-term agreement, China is more worried about the long-standing long-term supply contracts were canceled, so that the traditional iron ore pricing negotiations and supply of long-term mechanism will be completely broken, which is China's "compromise" accepted Rio Tinto's higher prices required by reason.

China Steel Industry Association, Anshan Iron and Steel Group General Manager Zhang also participated in open session, said China and Australia's iron ore price negotiations enterprises hope to be completed in June 30.

In negotiations with Rio Tinto announced the results, Baosteel side has repeatedly stressed yesterday, "the traditional pricing mechanism", as the maintenance of the traditional pricing mechanism, the maintenance of normal market order, and to maintain long-term friendly and downstream Cooperation , Baosteel and Rio Tinto finally reached ore prices for 2008.

However, the joint metal network analyst Hu Kai pointed out that Australia mining companies are unwilling to break the long-term contractual agreements and pricing mechanisms, as widely expected in 2009 or 2010, the global iron ore market will exceed demand, Australia should not benefit one or two years to ruin the interests of the next decade.

Cost Douzhang shuffle speed steel prices

From Brazil every year in China, Australia, South African and Canadian long-term contract iron ore imports about 2.5 million tons of iron ore alone, according to over 65% price increase, the average cost estimated to increase by 33 to 34 USD / tons, China's steel industry would need at least an extra expenditure of 8,400,000,000 U.S. dollars, together 60,000,000,000 yuan. The long-term contracts and medium-sized steel enterprises in China's total annual profit of just over 1400 billion yuan.

Joint metal mesh China's latest report is that, in addition to iron ore producers constitute the domestic iron and steel cost pressures, another major coking coal price increases of raw materials should not be ignored.

Shanxi coke price has again raised 300 yuan per ton, thus, only the cumulative price increase in June had 600 as the highest ever monthly increase in the price of coke round, and this year the price of prices soared 127% have been made over the same period in iron ore (up 53.4%), spot ore imports (up 50.4%) and scrap steel (up 38.1%) and other raw materials rise, which will cause the cost of steel production and renewed pressure on profit was extrusion.

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