Recently, people in the industry are concerned about whether iron ore prices will break through historical highs this year. The author analyzes the supply and demand situation, macroeconomic situation, and steel trend.
The first is about the iron ore supply and demand situation. In fact, the current demand growth has exceeded the growth of supply. From January to July this year, the total steel output of 64 major steel producing countries and regions in the world was 887 million tons, an increase of 8.3%. In July, the crude steel output of 64 major steel producing countries and regions in the world was 127.477 million tons, up 11.5% year-on-year and 0.7% month-on-month. In July, global crude steel production was in a state of sharp decline. Domestic crude steel output in July was 59.3 million tons, up 15.5% year-on-year and down 1.1% from the previous month. From January to July this year, the domestic iron ore raw ore output reached 691.918 million tons, an increase of 21.9%; the imported iron ore volume reached 386.63 million tons, an increase of 16.27%.
At present, the demand situation has already driven the supply. When the supply cannot keep up with the demand, the iron ore price is bound to rise, and the mine will raise the price. When demand continues to grow and supply is stable or non-growth, supply and demand stability will be lost. Therefore, the current demand situation is greater than the supply situation.
The second is about the impact of the macroeconomic situation on the steel market, mainly from the industrial value added, inflation and real estate investment.
First, analysis from the perspective of industrial added value. In July 2011, China's industrial added value increased by 14% year-on-year, down 1.1% from the previous month, and the growth rate has dropped. The main factors causing the decline in industrial added value are the implementation of policies such as summer electricity curtailment and energy conservation and emission reduction. With the gradual implementation of energy conservation and emission reduction policies, it will affect the production of some heavy industries, which may once again lead to a decline in industrial added value. As industrial added value continues to fall, the slowdown in downstream industry demand will certainly curb the rise in domestic steel prices. While steel prices are on the rise, domestic iron ore prices are unlikely to rise. However, it is worth noting that in the second half of this year, the elimination of backward production capacity has been continuously increased, which may lead to certain support for steel prices.
Second, analyze from the perspective of inflation. Due to the recent US debt problem, the Fed's policy has become the focus of global market attention. If the Fed launches the QE3 policy, it will inevitably lead to the depreciation of the US dollar and the rise of international raw material prices, then China will face inflationary pressure. Judging from the economic data released by the National Bureau of Statistics in July, China's CPI increased by 6.5% year-on-year, setting a new high for the year. Food prices increased by 14.8% year-on-year, and non-food prices increased by 2.9% year-on-year. If inflation continues to rise, it will lead to a decline in domestic domestic demand growth, which is not conducive to further increase in steel market prices. In addition, assuming that the Federal Reserve launches QE3, domestic inflation will continue to deteriorate, then the country will tighten monetary policy, making trade companies tight. As a result, steel prices have fallen, and the decline in steel prices will affect the iron ore market.
Third, analysis from the perspective of investment. From the perspective of real estate data, from January to July this year, China's real estate investment increased by 33.6% year-on-year, 0.7% faster than that of January-June. This is related to affordable housing, which has risen from the previous 34% to 56.6%. The steel used for the construction of affordable housing mainly consists of construction steel such as thread, wire and round steel, and the demand is large. Since 90% of the steel used in real estate is rebar and wire, the output of threaded snails required for 10 million sets of affordable housing in 2011 is 27-322.4 million tons.
According to incomplete statistics, the current operating rate of 10 million sets of affordable housing has reached 56.6%. The Ministry of Housing and Urban-Rural Development has established that 60% of the annual target will be completed by the end of September and 100% by the end of November. With the increase in the construction of affordable housing, the demand for construction steel in the second half of the year is expected to be boosted, and steel prices are expected to rise.
Finally, it is about the impact of the late trend of the steel market on the iron ore market. At present, the stable foundation of the domestic steel market is still weak, and the contradiction between supply and demand has not changed. Due to the contradictory role of trade enterprises in reducing inventory, steel prices have remained stable. With the promotion of affordable housing and the elimination of backward production capacity in the second half of this year, steel prices may show an upward trend in the coming months, but the magnitude will not be too large. As a result, iron ore prices have shown a slight upward trend.
Comprehensive analysis, domestic iron ore prices have rising conditions, but the current raw material prices are already at a high level, if the steel market demand is not fully released in the next few months, raw material prices will be difficult to further increase, breaking through historical prices The difficulty.
The rise in iron ore prices undoubtedly has a huge impact on steel companies. In the first half of this year, the profit margin of steel companies was only 2.93%, which is less than the fraction of foreign mining companies. But even then, the profits of domestic small and medium-sized private enterprises are still considerable, which makes some private enterprises increase their production, raise their prices, and the growth of steel production capacity pushes up the price of iron ore, which makes the price of iron ore easy to rise. .
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