Prediction and analysis of China’s iron ore supply and demand situation in 2013
At the end of 2012, the iron ore price trend which is closely related to domestic crude steel production capacity, become the main factors to predict the price of steel in 2013 once again in China.
In 2013, at least 70million tons of ore supply will be added at the international market. This also means that the years of the unbalanced moment for the supply and demand at iron ore market has been in the past. The situation of supply and demand in the iron ore market will be improved greatly; overall prices will be rational regression.
This is the long-awaited situation, though it needs a long time to be perfect process. It will have a positive effect on the stability of steel market price fluctuation. The west route of the new commodity spot electronic trading platform, senior researcher Qiu Yuecheng told this reporter that iron ore accounted for the largest part at the cost of raw materials in steel, the balance of iron ore supply and demand is the basis of the stability of steel price.
According to forecast of the Planning Institute of metallurgical industry, China’s steel demand will reach 666 million tons, year-on-year growth of 4.1%, and crude steel production will reach 746 million tons, an increase of 4.2% in 2013; and the demand of iron ore end products will reach 111 0 million tons, year-on-year growth of 4%, of which imports of ore demand is still more than 60%, will reach 760 million tons in 2013.
Imported ore inventory declined
With steel demand, seasonal characteristics and ore supply seasonal factors, in October and November of 2012, imported ore inventory rapidly declined while China’s crude steel production maintained a relatively low and stable situation causes.
No increase in the volume of steel in market while steel prices fell and iron ore price skyrocketed. Jia Liangqun, industry analysts who has a relatively optimistic expectations for the iron ore market, thought that because of the fears of the market risk, merchants was not positive for imported goods. Most domestic port ore inventory began to decline.
According to the west of the Shinkansen commodity spot electronic trading platform monitoring data show, iron ore prices in Hebei raised significantly, by 40 Yuan / ton in Feb,2013. Imported ore prices also raised continuously, wherein, 63.5% India fine ore price at $125 / ton, 62% grade’s iron ore price index for the 124.5 U.S. dollars / ton.
From a certain extent, this change in ore price formation cost pushed steel prices up in the off-season. This is a very unusual phenomenon.