The market is expected that by the end of 2013, the total capacity of the four major mines, BHP, FMG and freshwater valleys will reach 9.7 billion tons (equivalent to 7.84 million tons of raw iron production), which will reach 11.65 billion tons and 12.55 billion tons in 2015.
And the capacity of the inner mine is also being released. In 2013, the domestic mineral production is expected to reach about 1.41 billion tons, an increase of about 7.5%; by 2015, the domestic raw ore will reach 1.6 billion tons, and by 2020, 1.44 billion tons.
Liu Xiaoliang said that the supply cost determines the long-term price, in the long run, the iron ore market price will return to the marginal cost. According to the existing planning, the growth of the world's iron ore production capacity will exceed the demand in the future. However, due to the high cost of domestic resources, the dependence on imported minerals will remain at a high level in the future.
He predicts that more than 80% of the future iron ore increment will come from Brazil and Australia. The cost of providing Brazil to China is about 65 US dollars per ton, and Australia's cost to China is about US $60 / ton. The average production cost of China is about 105 US dollars / tonnes, of which 80 US dollars / tonnes are 40%, 80~100 dollars / tonnes account for 25%, 100~120 dollars / tonnes account for 15%, 120~140 and more than 140 US dollars / tons, each accounting for 10%.
At the same time, he pointed out that, at present, from the production cost of some foreign investment projects, the offshore cost of the iron concentrate for foreign investment in China is about 80 US dollars / tonnes, and the cost of CIF is 90 US dollars per ton. "In fact, the cost of CITIC Tai Fu and Clara iron ore should be much higher, to more than 100 US dollars".
He believes that most of China's high-cost mines will be forced to close down in the future, and some of China's relatively high-cost mines invested overseas will also face difficulties. Speculative capital invested in high places a few years ago will be affected by the decline in ore prices and will be squeezed out of the market.
Change in ore price or beyond imagination
"If the four mines are competing for the market share of China, the changes in prices may break through people's imagination and we should prepare for it," said Wang Yingsheng, director of the marketing department of China Steel Association. If the four mines compete, the competition will drive the whole iron ore, and the domestic mines will follow the competition, "if they do not compete." To strive for peace is another way. "
The above view was approved by Liu Xiaoliang, Secretary General of China Mining Association. At the same time, he also pointed out that the situation of oversupply of iron ore in the world is coming sooner or later. Faced with the changing supply and demand relationship and the adjustment of ore prices, many iron mines in China will face a crisis of survival. "How to deal with this problem will not only be a problem of mining enterprises themselves," he said.
On the other hand, iron ore is becoming more and more financial.
It is understood that in recent years, the coke and coke futures of the big merchants, the thread steel and the wire futures of the last period have been listed, and the hot rolled plates are also ready to go on the market. In addition, the Zhengzhou exchange is also working on the iron alloy listing.
In September 13th, the Securities Regulatory Commission announced that the iron ore futures trade was officially approved by big merchants, and the long expected iron ore futures have finally opened the "mystery veil", which marks the official launch of the "Chinese edition" iron ore futures.
Wang Yingsheng pointed out that attention should be paid to the formation of "virtual steel" in China. "Iron and steel products and their raw materials have now gradually have futures products, these products after the listing, financial institutions, speculators will participate, the future impact, may be far-reaching."
"Any kind of commodity, the more serious the trend of financial liberalization, the faster the fluctuation will be. Only in this way, many speculators can profit from it. In terms of the operation of the whole world economy, finance is the process of continuous gambling and distribution of resources, interests and risks. Analysts believe that the market is developing continuously, and the iron ore finance will bring about the new changes and opportunities in the supply and demand, the price change and even the employment situation.
"Whether it's hedging or hedging, for steel companies, you can get to know and use these financial tools," Wang Yingsheng said.