February iron ore imports rose 4.1%, iron ore prices fell into the spring

The ore price cannot continue to rise. Coupled with the high inventory of iron ore and the decline in domestic steel prices, ore prices will continue to decline. Although the prices continue to rise, China's iron ore imports are still increasing. Yesterday, according to preliminary statistics from China Customs, in February, China imported 48.64 million tons of iron ore, which was 29% lower than January's 68.97 million tons, up 4.1% from the same period in 2010. At the same time, imports of 117.6 million tons in January and February this year have increased by 23% compared to last year.

Along with the increase in imports, there is also the price of imported iron ore. According to the statistics of the famous domestic steel spot trading platform, the Nishijin Shinkansen, China's average import price of iron ore in February was US$158.40 per ton, which was US$6.99 per ton more than January’s price of US$151.41 per ton, an increase of 4.62%. This means that the profits of Chinese steel companies have to be eroded again by “crazy stones”.

Imports in February were actually not low despite a sharp drop from the previous month in January, but in the view of Union Metals analyst Hu Kai, China’s iron ore imports were not low in February. “First of all, there are Spring Festival factors and daily averages in February. Comparing the data, the import data for February and January are similar; secondly, most of the iron ore imports in February came from contracts signed between steel companies and miners in December or January last year.”

However, Lange Steel Network analyst Zhang Lin told the “International Financial News” reporter that compared to the end of last year and January of this year, iron ore trading market in February has been deserted, so the sharp decline in the chain than expected.

Analysts also found that China's crude steel production was also boosted along with the import of iron ore. The China Iron and Steel Association (hereinafter referred to as "China Steel Association") showed that the national crude steel output in the middle of February this year was 1,800,400 tons, which was a significant increase from the output of 1,703,000 tons in January. At the time, Hu Yanping, an analyst at Union Metals, described the production of crude steel as "above expectations."

“This may indicate the linkage between crude steel production and iron ore imports, but China does not lack iron ore at all,” said an industry source. According to the data, as of last week, China's major ports imported 80.79 million tons of iron ore inventories and remained at a high level. This can meet the demand for raw materials for Chinese steel companies for two months.

"The rising import volume does not rule out the hype of some traders," said Hu Kai.

The ore price continues to fall in the short term. “Iron ore is the lifeline that affects the survival of companies.” Wu Xinchun, deputy secretary-general of the China Iron and Steel Association, previously used this phrase to describe the problems encountered by Chinese steel companies. As for the import ore price in February, this “difficulty” will continue.

"It now appears that Chinese steel companies' profits will be compressed in February." Zhang Lin and Hu Kaijun believe that "in the short term, the situation of meager profits and even losses will continue. In particular, the three major iron ore suppliers have recently raised their rankings. Second-quarter agreement quote."

Fortunately, spot iron ore prices have started to fall. Lange Steel Network statistics show that the market "wind vane" 63.5% of the Indian ore has fallen from the high of nearly $ 200 / ton to $ 180 / ton.

"The spot price will go down." Zhang Lin frankly said that because domestic steel prices have fallen. According to the monitoring of the Shinkansen Shinkansen, the steel price index of 4680 on March 10 fell by nearly 90 points from the index of 4790 on February 28.

Hu Kai also believes that the "fundamental level" of spot ore prices is not good, "the price of ore can not sustainably increase, coupled with high inventory of iron ore and high domestic steel prices, the ore price will continue to decline. It can be expected that In the third quarter, the ore price will fall."

Wu Xinchun said earlier that the supply of iron ore will be tight before the end of 2011, and the price will be low before and after the high. He also pointed out that the current ore prices, which have been "highly blown", are expected to fall in March or April.