Steel industry encounters two attacks: Ore prices bullish steel prices bearish
On November 19, in the 7th session of the strategic development and investment summit of the steel industry chain, Yang Siming, chairman and CEO of Nanjing Iron & Steel Group, said in an interview with this reporter that it is expected that the price of long-haul iron ore will increase by 5% to 10% next year. .
Yang Siming predicted the reasons for this increase. Although the initiative for iron ore negotiations is still in the hands of the three major mines, domestic steel mills have basically no profit margins. Zhou Guocheng, the chief advisor of China United Iron and Steel Network and former vice president of Sinosteel, believes that "the increase will be between 5% and 15%."
When a reporter asked about Yang Siming's views on the "Chinese model" of iron ore proposed by the China Iron and Steel Association, Yang Siming hesitated and said with a smile: "I am a member of the China Steel Association, and of course I have to support their proposals."
Yang Siming is even more worried that the skyrocketing ocean freight charges will impose a huge cost burden on steel companies. “For steel companies, the long-term mine price rises by a few dollars slightly, and it is not a big deal, but the skyrocketing ocean freight charges are more than ten dollars and a few tens of dollars. This affects the cost of steel mills more than iron ore. Price increases."
A manager of CITIC Metal also expressed the same concern. “Currently, the shipping costs of Brazil and Australia to China are all up more than 50% from the lows of this year. Therefore, we tend to set prices on the shore.â€
While generally seeing long-term ore prices, the industry is pessimistic about the trend of steel prices.
“At present, most of the steel mills are on the edge of profit and loss, and there is basically no intention of reducing production. Together with the unprecedented increase in steel inventories, I expect the market will soon enter the down channel.†Zhou Guocheng said.
A middle class of CITIC Pacific Steel also stated that the steel price is now a heads-up fly. “Don't dare to rise or dare to fall. This may indicate that the bad time is coming.†“Especially a large number of social banks have no organization. Discipline, once released, the steel market is bound to be greatly affected."
"I think that the most difficult time for steel companies will be in the first quarter of next year." Zhou Guocheng expects. Yang Siming even believes that "the steel will have an ultra-low price band."
Mr. Luo Bingsheng, executive vice president of the China Iron and Steel Association, is even more blunt. "Under the influence of heavy supply exceeding demand, there is downward pressure on steel prices, which may force some companies to suspend production or stop production."
Yang Siming predicted the reasons for this increase. Although the initiative for iron ore negotiations is still in the hands of the three major mines, domestic steel mills have basically no profit margins. Zhou Guocheng, the chief advisor of China United Iron and Steel Network and former vice president of Sinosteel, believes that "the increase will be between 5% and 15%."
When a reporter asked about Yang Siming's views on the "Chinese model" of iron ore proposed by the China Iron and Steel Association, Yang Siming hesitated and said with a smile: "I am a member of the China Steel Association, and of course I have to support their proposals."
Yang Siming is even more worried that the skyrocketing ocean freight charges will impose a huge cost burden on steel companies. “For steel companies, the long-term mine price rises by a few dollars slightly, and it is not a big deal, but the skyrocketing ocean freight charges are more than ten dollars and a few tens of dollars. This affects the cost of steel mills more than iron ore. Price increases."
A manager of CITIC Metal also expressed the same concern. “Currently, the shipping costs of Brazil and Australia to China are all up more than 50% from the lows of this year. Therefore, we tend to set prices on the shore.â€
While generally seeing long-term ore prices, the industry is pessimistic about the trend of steel prices.
“At present, most of the steel mills are on the edge of profit and loss, and there is basically no intention of reducing production. Together with the unprecedented increase in steel inventories, I expect the market will soon enter the down channel.†Zhou Guocheng said.
A middle class of CITIC Pacific Steel also stated that the steel price is now a heads-up fly. “Don't dare to rise or dare to fall. This may indicate that the bad time is coming.†“Especially a large number of social banks have no organization. Discipline, once released, the steel market is bound to be greatly affected."
"I think that the most difficult time for steel companies will be in the first quarter of next year." Zhou Guocheng expects. Yang Siming even believes that "the steel will have an ultra-low price band."
Mr. Luo Bingsheng, executive vice president of the China Iron and Steel Association, is even more blunt. "Under the influence of heavy supply exceeding demand, there is downward pressure on steel prices, which may force some companies to suspend production or stop production."