Post Code:253800
        Address: Xiazhuang Development Zone, Gucheng County, Hebei Province

        Bad iron ore demand "paper tiger"

        Number of visits: Date:2016-01-15

        At present, the steel consumption into the off-season, no improvement in the fundamentals of weak iron ore, iron ore prices will continue to fear downward pressure, suggest that investors remain cautious bearish ideas.

        Now the price of Qi or

        By steel production is expected to enhance the impact and rebar prices continue to decline, the benchmark contract iron ore prices continue to refresh the lows, at present, the main iron ore contract positions gradually increase, long and short at 290 yuan / ton line battling.

        Spot, the global iron ore market continued to run low. December 11, Platts 62% grade iron ore index was 38.6 US dollars / ton, compared with the previous week, dropped $ 1 / ton. At present, Qingdao Port and Rizhao Port 61.5% pb powder mainstream offer are 295 yuan / ton, compared with the previous week, down 10 yuan / ton, the business mentality of pessimism, the overall turnover is poor. At the same time, domestic iron concentrate prices fell.

        Steel production, shrinking demand

        China Metallurgical Industry Research Institute, December 7 forecast released report shows that in 2015 China's steel consumption of 668 million tons, down 4.8% in 2016 will be further reduced to 648 million tons. Meanwhile, according to CISA statistics, in late November, focusing steel enterprises crude steel output 1.648 million tons, a decline of 2.56%; the national estimate is 2.067 million tons, a decline of 3.15%. Downstream market will continue to shrink long-term iron ore price formation suppression.

        At present, the steel consumption into the off-season, steel mills generally pessimistic about the market outlook, the blast furnace operating rate continued to decline. As of December 11, the national steel mill blast furnace capacity utilization rate of 76.24%, down 0.69% from the previous week. Steel procurement will is not strong, the volume of equipment in the iron ore compressed to 20 days.

        By funding chain tension and other factors, there are two recent level above 5 million tons of steel prices have been announced the shutdown, and many steel enterprises are forced to take measures to protect themselves layoffs efficiency of the entire steel industry outlook clouded, high debt Steel plant shutdown risks. Demand for iron ore or shrink further downward pressure on prices increases.

        Supply diminished, intractable conflicts

        Customs statistics show that in November China imported 82.13 million tons of iron ore and concentrates, compared with the previous month increased 6.61 million tons, an increase of 21.9%; iron ore port stocks continued to increase, as of 11 December 9209 has reached tons; the end of November, 26 key enterprises to 22.82 million tons of iron ore stocks, rose 0.88% MoM. Late iron ore market oversupply contradictions are still prominent, prices will continue to be weak run.

        Domestic mining due to higher costs, profitability difficulties, capacity utilization continued to decline this week, has dropped to 42.4%. But the four major international mining companies with their own cost advantages, continue to increase, aimed at squeezing rivals to seize market share. Therefore, it is difficult to change the pattern of oversupply of iron ore, iron ore prices will remain under pressure.

        Poor macroeconomic data, pessimism continued

        The official PMI index in November was 49.6%, compared with October, down 0.2 percentage points in the four consecutive months below the line ups and downs, and hit the lowest level since September 2012's. Mining in the steel industry PMI three-day losing streak, down 5.2%. From the sub-indicators, the production index, new orders index, raw materials inventory index fell significantly, new export orders index, finished goods inventory index increased significantly. Macro data poor performance, pessimism heavy destocking and future production efficiency and other "supply side reform" is still the steel industry "theme." Affected by weak iron ore prices will continue to fall pattern. At the same time, the recent Beijing, Tianjin haze reproduce, steel production is expected to increase further suppress demand for iron ore.

        In summary, the steel consumption into the off-season, cut steel prices increase, the poor performance of macroeconomic data, economic downward pressure, the international mining giant continued to increase, port stocks continued to increase, supply and demand is still outstanding. Superposition of many unfavorable factors, the price of iron ore difficult to pick up signs.

        We believe in the fundamentals before a decisive change, will continue to remain weak iron ore operation, suggest that investors can continue to take back the downward trend line rallies short strategy.

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