Since late February, iron ore prices, which have risen significantly during the year, have rebounded again after a brief decline. As of the afternoon closing of March 1, the price of China’s iron ore futures rose 5.51% to close at 737.5 yuan / ton.
the price change of iron ore has attracted the continuous and close attention of regulators february 28, the national development and Reform Commission announced that in order to strengthen the linkage supervision of iron ore spot and futures, the price department of the national development and Reform Commission, the finance department and the price supervision and Competition Bureau of the State Administration of Market Supervision recently went to Dalian Commodity Exchange to carry out joint research.
The research group held a special meeting with the big business office to analyze the operation of the iron ore market and investigate the abnormal trading behavior in the futures and spot market relevant departments stressed that they would continue to strengthen the daily supervision of the spot and futures markets, strive to strengthen penetrating supervision, severely punish illegal acts according to law, earnestly maintain the normal market order and ensure the stable operation of iron ore market prices
regulators pay close attention to market changes
As early as before the Spring Festival, when there was no significant change in supply and demand, the price of iron ore continued to rise significantly, which attracted the attention of all parties. The national development and Reform Commission made a voice for the iron ore market several times.
On January 28, the national development and Reform Commission issued a document saying that the price of iron ore rose sharply, during which there were many abnormal fluctuations. However, at present, the supply and demand of the iron ore market is generally stable. China’s inventory is at a high level for many years. Recently, the price has risen too fast, and there is speculation.
At that time, the national development and Reform Commission said that it was highly concerned about the changes of iron ore market prices. In addition to strengthening supervision and cracking down on illegal acts such as malicious speculation, it would also study and take further effective measures to effectively ensure the stable operation of iron ore market prices.
After the Spring Festival holiday, the national development and Reform Commission issued a number of notices, jointly interviewed iron ore information enterprises with relevant departments, and sent a joint research team to carry out research on the supervision of iron ore market in some commodity exchanges and key ports, listened to the relevant parties in strengthening the linkage supervision of futures and spot markets, and severely cracked down on fabricating and disseminating price increase information, hoarding, driving up prices Opinions and suggestions of malicious speculation.
the national development and Reform Commission requires relevant iron ore information enterprises to provide factual sources of information release, and reminds and warns relevant enterprises not to fabricate and release false price information, not to fabricate and spread price increase information, and not to bid up prices
Since then, the price department of the national development and Reform Commission and the price supervision and Competition Bureau of the State Administration of market supervision went to Qingdao to conduct joint research to fully understand the changes of Qingdao Port International Co.Ltd(601298) iron ore inventory; Organize port associations and some port enterprises to hold special meetings and require some iron ore trading enterprises to release excessive inventories and restore them to a reasonable level as soon as possible.
According to the China Iron and Steel Industry Association, Luo Tiejun, vice president of China Iron and Steel Association, pointed out in an interview with China Metallurgical news that in view of the recent changes in the iron ore market, we should not only crack down on public opinion speculation, futures speculation and hoarding, but also strengthen the supervision of the capital market and participants, so as to truly make the capital market serve real enterprises.
iron ore price under pressure
Looking back at the recent trend of iron ore prices, after falling to the low point of the year in November last year, China’s iron ore futures prices rose again.
On November 19, 2021, the price of China’s main iron ore futures fell to 509.5 yuan / ton, the lowest in more than two years since then, the price has gradually increased, reaching the maximum of 850 yuan / ton on February 11, with an increase of more than 60% in three months
Since then, the price of iron ore has fluctuated lower, falling to around 700 yuan / ton, and has risen slightly again recently.
The price trend of ordinary iron ore is also similar. In the middle of November 2021, the price of ordinary iron ore fell below the $90 / ton mark, more than 60% lower than the $233.1 / ton price set in May of that year. Since then, the price of ordinary iron ore has gradually risen, and has now rebounded to more than 130 US dollars / ton.
Wang Jing, a researcher at Lange Iron and Steel Research Center, said that for the iron ore market, supply-demand relationship is the main factor determining the price change, at present, the blast furnace operating rate of major iron and steel enterprises in China is at a low level, and the steel mills are expected to resume production in the later stage, driving the demand for iron ore.
“However, the iron ore inventory in the port has reached a new high. The relevant departments have strengthened market supervision and cracked down on speculation. There are risks that the demand for steel is lower than expected. The overseas monetary policy has accelerated to suppress bulk commodities, and the momentum for the rise of iron ore prices is insufficient.” Wang Jing said.
ITC futures Ferrous Metals Research Center pointed out that in the first quarter, due to the end of impulse and the impact of natural weather, the iron ore shipment volume in Australia and Brazil was relatively low, but the high ore price stimulated the active shipment of mines. Under the continuous regulatory pressure, the space above iron ore has been limited, the supply is stable, the demand returns, and the kinetic energy of iron ore price decline is not strong. It is expected that the iron ore price will mainly fluctuate in the range.
mining enterprises and steel enterprises have made outstanding achievements
In 2021, benefiting from the collective sharp rise in the prices of bulk commodities such as iron ore and steel, the performance of relevant industries was brilliant.
Vale, a global mining giant, achieved a net profit of US $22.4 billion in 2021, a year-on-year increase of US $17.6 billion. Vale’s iron ore production capacity increased from 322 million tons at the end of 2020 to 340 million tons at the end of 2021. The sales volume of iron ore fines in the fourth quarter hit a record in the same period, reaching 82.5 million tons, an increase of 22.6% month on month.
Rio Tinto achieved a net profit of US $21.09 billion in 2021, a year-on-year increase of 116%; It paid the highest total annual dividend ever, reaching $10.40 per share, with a dividend yield of 79%.
BHP Billiton achieved an operating profit of US $14.8 billion in the first half of fiscal year 2022 (July December 2021), an increase of 50% year-on-year; The basic earnings per share was $1.86, a year-on-year increase of 144%. BHP Billiton also announced an interim dividend of $1.50 per share, which has brought more than $22 billion to shareholders in the past 18 months.
The benefits of China’s iron and steel industry in 2021 show the characteristics of high in front and low in back, the sharp rise of iron and steel prices in the first half of the year led to the rise of performance, and the high price of iron ore in the second half of the year affected the operation of steel enterprises. But overall, the operating efficiency of China’s iron and steel industry still increased significantly last year.
According to the data disclosed by the Department of raw materials industry of the Ministry of industry and information technology, the cumulative crude steel output in China was 1.033 billion tons in 2021, a year-on-year decrease of 3.0%; The annual import of iron ore was 1.12 billion tons, a year-on-year decrease of 3.9%, and the average price reached US $164 / ton, a year-on-year increase of 55.3%.
According to the data of the Ministry of industry and information technology, in 2021, the cumulative revenue of national key large and medium-sized iron and steel enterprises was 6.93 trillion yuan, a year-on-year increase of 32.7%; The total accumulated profit reached 352.4 billion yuan, a year-on-year increase of 59.7%, a record high.
