Luo Bingsheng: Sharp rise in international iron ore prices caused low profits for steel companies

In 2010, the global iron ore seaborne trade has been in a state of high price. China imported 682 million tons of iron ore, and the average price rose by US$48.51 per ton. The sales profit of 77 large-scale iron and steel enterprises was only 2.91% for the whole year. The reason is due to the sharp increase in international iron ore prices.

The China International Economic Exchange Center held the 20th “Economic Monthly Talks” at the Beijing Media Center on the 23rd. The theme is: the status of international commodity markets and price trends.

Luo Bingsheng introduced the supply of iron ore resources needed for steel production in China in 2010 at the press conference. According to reports, China produced 1.07 billion tons of iron ore in 2010, an increase of 170 million tons over the previous year, an increase of 21.59%. In 2010, China imported 682 million tons of iron ore, a decrease of 91.347 billion tons over the previous year, a decrease of 1.46. %. In 2010, China produced 590 million tons of blast furnace iron, an increase of 40.79 million tons over the previous year, an increase of 7.42%. Calculated in accordance with the iron content of iron ore, considering that at the end of 2010, the inventory of imported iron ore in China's ports was about 80 million tons, which was the same as the same period of last year. In other words, the 40.49 million tons of pig iron produced in China in 2010 accounted for 6.9% of the total pig iron production that year, all of which were domestic iron ore supplies, which reduced China's dependence on imported iron ore. In 2010, China imported 618 million tons of iron ore, of which four countries from Australia, Brazil, India, and South Africa imported 522 million tons of iron ore, accounting for 84.43% of China’s total imports. It is the main source of iron ore imported by China for a long time.

Luo Bingsheng pointed out that in 2010, the global iron ore seaborne trade has been in a state of high price. The average CIF value of iron ore imported from China is as high as 128.38 U.S. dollars per ton, an increase of up to 60.74%. In particular, BHP Billiton announced the import of iron ore in recent days. The price was increased from US$155/tonne in January to US$168/tonne, which is Australia’s FOB price. Shanghai freight is added to China’s port at approximately US$200/tonne iron ore. In 2010, China imported iron ore. The “long association mine” accounted for 34.33%, and the spot mine accounted for 65.67%. In 2010, the average grade of iron ore we imported was 61.7%, a drop of 0.75 percentage points from the previous year, which means that the quality of imported iron ore is declining. .

Luo Bingsheng said that due to the significant price increase of imported iron ore, it has also drastically increased the price in the domestic market. Domestic statistics on large-scale steel companies, in 2010, the domestic market production and sales of powder ore price reached 932.55 yuan / ton, up 46.44% over the previous year. In 2010, we counted 77 large-scale iron and steel enterprises. The company’s total sales revenue for the year was 3.08 trillion yuan, an increase of 33.58% over the previous year, and a profit of 89.715 billion yuan, an increase of 52.02% over the previous year. The sales profit rate for the whole year was only 2.91%, which was lower than the average level of the national industrial industry.

Luo Bingsheng said that due to the sharp increase in the original price, only imported iron ore, 618 million tons of iron ore was imported in 2010, an average of US$48.51 per ton of iron ore, and US$30.01 billion in additional payments for the entire year. Calculated according to the exchange rate of 1:6, equivalent to US$1,980, it is necessary to fully enter the cost of steel production. It is 2.11 times the annual profit of Chinese large and medium-sized steel enterprises in 2010, which is 2.27 billion yuan. This figure shows that the Chinese steel industry in 2010 The main reason for the overall efficiency is due to the significant increase in international iron ore prices.