Iron ore dangerous steel companies can not stand on the side of the fire

When the opportunities and the first time we pass by and we do not cherish, this may be our carelessness. But when it came to us again, we were still indifferent. After that, we should not even have complaining qualifications. Because you should pay for your own "not long-term memory."

Whether it is the collective bargaining in the past or the later iron ore, it is fair to say that we have not won the right to speak out for iron ore pricing. On the contrary, the current downturn in the steel industry has helped us a lot. As the collective "unconscious" purchases fell, iron ore rarely showed signs of decline. For the Chinese steel companies, what we need now is “robbing”, this is the best time for Chinese steel companies to go to sea to upgrade their strategic reserves.

First of all, it should be made clear that although the steel industry is currently in an overall downturn, our potential demand for iron ore remains huge. Over the years, Chinese steel companies have been playing the role of “wage earners” in overseas mines. Steel companies have been eroded by iron ore for most of their profits. However, what is embarrassing is the fact that Chinese iron and steel companies have a long process, so it is difficult to change their dependence on iron ore in the short term. Coupled with the multi-reinforced concrete in the construction field, the recycling period of the scrap steel is long, and it is difficult to form an effective supplement to the steelmaking resources.

In 2013, China's comprehensive steel price index was 102.76 points, a year-on-year decrease of 8.6%. The average annual landed price of imported iron ore was US$129.03/ton, which was a year-on-year increase of US$0.28/ton, up 0.22%. The price-to-price ratio between imported iron ore prices and steel prices has been completely broken, and the situation with rising prices, falling prices, and escalating tensions has intensified. It even reached the point where the price of imported iron ore was still rising. The fact that the iron and steel industry's normal operating profits and diversified operating profits are all supplied to foreign iron ore have not changed much.

Secondly, the pattern of overseas prospecting and shareholding is better than one's own. At present, this type of equity participation is a common method used by Japanese and South Korean steel companies. The advantage of doing so is that even if the price of ore to affect their own costs, it can also use the profits brought by the price of ore to make up for their own losses in the main steel industry. This is faster and less resistant than independent development. Especially when resource protectionism prevails, it seems that local people will work more smoothly in the local area.

Especially in recent years, shareholder returns have been sluggish, and mining companies have become less popular among investors. And these investors, especially those who demand rapid growth in recent years, have prompted companies to acquire assets at excessively high prices. As the internal rate of return becomes unsustainable, the mining sector has experienced a record-breaking large number of write-offs and impairments that have resulted in the cutting off of the equity market leader. As far as Chinese steel companies are concerned, for those miners with potential for development and “very poor” money, this is the best opportunity for us to “get guilty”.

In extending the industrial chain and maintaining the security of upstream iron ore resources, Wuhan Iron and Steel will no doubt walk in front of other Chinese steel companies. At 2 pm on March 23rd, GMT Shipping’s Phoenix Ocean Freighter slowly parked at Taicang Wugang Ferry, and the first ship of Wuhan Iron and Steel Company shipped its own overseas ore to China. The ship is loaded with 46,000 tons of iron ore, produced in Liberia State Mines. The same day at the Taicang Customs declaration commodity inspection, will be replaced by the river ships recently shipped back to the Wuhan Iron and Steel Industrial Harbor.

In recent years, Wuhan Iron & Steel has vigorously implemented its "going out" strategy, increased overseas investment in resources, and has established iron ore projects in Liberia, Canada, Brazil, and other countries. It has become the largest owner of ore resources among global steel manufacturers.

Once again, the establishment of a global iron ore resource security and security system should rise to the strategic level of China's government. For Chinese steel companies looking for minerals at sea, the government should provide support for funds and policies. In particular, in today's relatively tight capital chain of the steel industry, steel companies cannot be forced to “seek poor money” and lack the incentive to go to sea for prospecting. In the next steel boom, he was again allowed to kill.

In addition to this, "there is no shortage of grain at home," and while going out to the sea, we should also increase the concentration of mines in the interior so that it can truly grow into a powerful supplement for foreign mines and even be able to stand in court. Then there is the need to make full use of and optimize the existing tools for winning the right to speak, and actively enhance their influence. In particular, the Chinese iron ore price index needs to be more timely, more comprehensive, more fair, more real, and more useful.

After God has closed a door for us, it will also give us a window. For China's steel companies, today's negotiations on the long-negotiation mine are dead. Today, how to use the current dangerous situation of the steel industry to find the right to speak of iron ore is our top priority. Opportunities are fleeting. After missing out, maybe there is really no chance.