China is studying the establishment of iron ore security system

On August 3, the official website of the China Iron and Steel Association announced that in the first half of the year, the price of imported iron ore in China rose by nearly 50%, but the quality was getting worse. In view of the fact that the world’s three major mines have forcibly changed the iron ore trading model and the trend of financialization has become increasingly apparent, China is currently studying the establishment of an iron ore security system.

According to Shan Shanghua, secretary general of the China Iron and Steel Association, the global iron ore shipping trade market has undergone drastic changes since the second half of last year. International financial capital has been involved and major foreign suppliers have used their monopolistic advantages over resources to continuously raise their prices. The sharp increase in ore prices in the quarterly pricing model has jeopardized the normal production and operation of steel companies.

Among them, in the first half of this year, the price of imported iron ore in China has fallen. In the first half of the year, the average CIF price was US$111.5/ton, which was an increase of US$35.6/ton from the same period of last year, an increase of 46.9%. Among them, as high as 139.85 US dollars / ton in June, an increase of 71.72 US dollars / ton over the same period the previous year, up 105.3%. In particular, while iron ore import prices have risen sharply, their grades have become lower and lower and their quality has become worse. According to the inspection results of the State Administration of Inspection and Quarantine, the qualified rate of imported iron ore last year was only 51%. In the first half of this year, the quality of imported iron ore was even worse.

According to Shan Shanghua, China's steelmaking production mainly depends on molten iron, and the iron-steel ratio has been above 0.96 tons/ton. Therefore, iron ore will be used as raw material for steel production in the short term. Under this circumstance, we must establish a national security system based on specific conditions.

This system includes four aspects, one is to improve the scrap recycling system; the other is to invite the state to encourage the acceleration of domestic iron ore development, to ensure that domestic mines account for more than 40% of the share; third is to actively promote the "going out" development strategy, and strive to make our overseas The ratio of equity to ore has been greatly improved; the fourth is to study countermeasures against three major foreign iron ore suppliers and strive for fair trade rights and interests.

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