"This is a long, long term rise." Shandong iron ore import and export trading company Wang Yong (alias) for the new financial observer reporter said.

Nine years ago, Wang Yong opened his own iron ore trading company, "at that time the situation is" hoard much, earn more ", ore prices all the way up, until 150 - 160 U. S. dollars / ton Platts 62% iron mine." As a result, he expanded the annual trade volume of enterprises from less than 100 thousand tons to 400 thousand tons within a few years. But since the ore price falls to 90 dollars / ton, he would not have what hope, the clerk of the company from the 6 peak period was reduced to 3.

However, since October last year, Wang Yong has seen hope again. So far, he clearly remembers, "in October 4th the price was $54.85 / ton, rising from that day, and now it has risen to more than $90 / ton, the highest reached 95 US dollars / ton."." Although there have been several slight drop, but the overall can be said to be the way up, "count, you know, up more than 70%."." In addition to Wang Yong, the bigger ones are vale, Rio Tinto and BHP Billiton, the three giants of the import mine.

Data show that in 2016, China imported 10.24 tons of iron ore, an increase of 7.5%, China's iron ore external dependence has exceeded 89%.

The three mines are naturally the first to benefit from mining enterprises. In February, the three major mines issued the annual financial report or semi annual report in 2016, compared with the same period last year to achieve profitability. Vale's annual revenue increased by 14.7%, net profit of $3 billion 982 million, and net loss of $12 billion 129 million in 2015. BHP's net profit in the second half of 2016 was $5 billion 669 million from a loss of $3 billion 204 million over the same period last year. Although Rio Tinto's revenue declined by $1 billion over last year, net profit rose from $866 million in 2015 to $4 billion 617 million in 2016. The three major mines almost simultaneously admit that the main reason for the loss is iron ore prices.

Steel price drive

As is known to all, iron ore is one of the most important raw materials for iron and steel production, ore prices rose more from the support of steel prices. The same is true of the reality, steel prices began to rise earlier than the price of mineral products in nearly half a month.

Since February 2013, steel prices have fallen below 2000 yuan / ton in three years, reaching the lowest point in ten years. But since the second half of last year, the domestic steel price began to go all the way up. And this wave of upward at the beginning, is to make some insiders did not think of.

A steel trading company in Tianjin told the new financial observer that his business had not been very good before November last year. "Maybe the area is different. Anyway, the price rise in our country probably started in November."." Because this city is not good, so basically in the digestion of inventory. "When the wave just began to rise, I didn't expect to continue rising." Later, "one day a price" made him earn a lot, but the heart is still muttering, because in his experience, "demand must have, but the demand alone will never hold up so long price hike."."

He found a different price during the phenomenon, before the price increases his shipments is also great, but the price is not too high, "this time is obviously go less, but the price up." He judged that this situation is likely to be man-made or expected factors, so that prices rise, the actual demand is not so much, "there are always people in need on the market, so the price is high also have to buy."." The steel trade business theory.

In my iron and steel information director Xu Xiangchun seems, after the lunar calendar fifteen weather began to warm, the site gradually return to work, this demand is certainly true. At the same time he also acknowledged the great relationship the optimistic expectations of the market and the market, from the supply side, this capacity to further intensify, especially on the ground of steel policy, there may be of steel used in construction stage of tension."

Steel factory with this expectation, raise the price is not difficult to understand.

Unstable market outlook

Although the long - term rise in steel prices, so that the steel industry ushered in the "Indian summer", but this situation can maintain for how long, it is difficult to say. Based on this, the future ore prices continue skyrocketing was unknown.

Of course, from the policy point of view, it can be said that the demand for steel in the future is a good. This can be seen from the government's push for infrastructure investment this year, one or two.

 

Among them, the most typical is, Xinjiang take measures to implement the fixed assets investment increased by 50% in 2017. "Fixed asset investment to grow by 50%, which is impossible, although not all the country has increased so much, but this is equivalent to send a signal, this year's national infrastructure should be great."." Founder Securities is expected in 2017 the completion of infrastructure investment will increase more than 20%. Public data show that in January this year, the national development and Reform Commission approved the approval of 18 fixed asset investment projects, with a total investment of 153 billion 900 million yuan. This year, the number of new railway projects will reach 35, and the investment in railway construction will remain high.

In addition, according to the construction machinery association data, in January, the domestic excavator sales reached 4548 units, an increase of 54% compared with the same period last year. Excavators are widely used in various construction projects, and the production and sales of heavy trucks have also increased, which is helpful to the demand for steel in spring." Xu Xiangchun said. With these unexpected expectations, steel mills have enough reason to raise prices, but the question is whether these expected requirements can be released.

Steel trade list above