Business Society analyst: China's iron ore supply or into the transition period

Analyst Chen Kai, an iron ore analyst at the business club Iron & Steel Branch, recently analyzed that a large number of iron ore such as Chile and Africa have recently entered China, indicating that China’s iron ore supply has gradually entered a “transition period”.

China is the world’s largest consumer of iron ore. In recent years, China’s iron ore imports have been ranked first in the world, accounting for about 70% of the total global trade in iron ore. However, due to the lack of effective competition coupled with a sharp increase in demand, international iron ore prices have almost doubled in the past two years. According to the monitoring by the business club's steel branch, taking 62% of Indian fines from Rizhao Port (600017) as an example, the price of imported iron ore in August last year was 1,090 yuan/ton, compared with 1,255 yuan/ton in the same period of this year, an increase of 15.1% year-on-year.

At present, although the total amount of iron ore imported in China is still very large, the proportion of traditional suppliers such as Rio Tinto, BHP Billiton and Vale has decreased. According to data released by the General Administration of Customs earlier this year, China imported 61.863 million tons of iron ore in 2010, a year-on-year decrease of 1.4%. China's imports of iron ore from Chile and Africa are intended to break the monopoly position of iron ore in Brazil and Australia and increase China’s discourse power in international iron ore negotiations and trade.

According to the monitoring by the Business Club’s Steel Branch, due to the current increase in profits from mining, emerging mining areas such as the Middle East, ASEAN, and Central America emerged. In 2010, China imported more than 40 sources of iron ore, covering Asia, Europe, Australia, Africa, and the United States, and only imported more than 10 million tons of iron ore from Iran and Ukraine.

In addition, investors are also planning to invest heavily in resource-rich West Africa and Central Africa. In the medium and long term, these projects are expected to deliver 250 million tons of iron ore to China each year, accounting for about the current total annual imports. one third.

At the same time, as the third largest steel company in China, Wu Gang stated that iron ore will be self-sufficient before 2015. All kinds of signs indicate that under the efforts of Chinese companies to break the monopoly and gain the right to discourse in iron ore trade, the supply of iron ore has gradually entered a “transition period”.