Yang Jiasheng: Iron ore prices will enter a downward channel

Yang Jiasheng, Chairman of the Presidium of the China Association of Metallurgical and Mining Enterprises, predicted at the "Steel House Steel Strategic Development Strategy Forum" that in 2014, iron ore prices will enter a downward channel. However, the low prices expected by steel companies will not become a reality in the short term.

Yang Jiasheng believes that due to the impact of the macroeconomic situation and the development of the steel industry, the demand for iron ore has turned from a high-speed growth to a low-speed growth, and an increase of about 3%-4% may need to be maintained for a long time; among them, the increase in domestic mines in 2014 It is basically able to meet the new demand. It is estimated that the increase in iron ore demand in 2014 will be 32 million tons (calculated based on 740-750 million tons of pig iron production, an increase of 20 million tons), and the output of domestic ore will increase by about 100 million tons in 2014 , The converted mine is exactly 31.2 million tons.

　　 However, there are also many people in the industry who believe that the problem of insufficient domestic supply capacity will always exist, and the amount of imported ore will continue to increase, especially high-quality ore may become tight.

　　 Yang Jiasheng believes that temporary and localized supply and demand tensions will still occur. On the one hand, domestic steel mills and traders agree that iron ore prices will enter a downward channel, and adopt wait-and-see and low inventory strategies; on the other hand, international mining giants adopt control measures, and traders are reluctant to sell or have no stock to sell, leading to Tight supply and demand in phases. In a certain stage, once steel production capacity is released, the rigid demand for iron ore forces steel mills to passively purchase high-priced ore, forming a new round of price increases. "The iron ore market continued the above cycle in the first and third quarters of 2013, and I am afraid it will be inevitable in the future."

　　Yang Jiasheng predicts that the average CIF price of imported mines will fluctuate around US$120/ton in 2014, and the fluctuation will decrease. The price of minerals was basically the same as in 2013, with a slight decrease. At the same time, it will be affected by the price of imported ore. However, many people in the industry predict that the average CIF price of imported ore may drop to US$110/ton or even below.