Recently, at the 2012 Iron Ore International Market Symposium, the Ministry of Industry and Information Technology, the State Council Development Research Center and domestic and foreign steel industry experts reached a consensus on the current oversupply situation in the iron ore market. Wang Xiaoqi, vice president of China Iron and Steel Association, pointed out at the meeting that iron ore prices generally showed a downward trend in this year, but the fluctuation range will be greatly reduced compared with last year. In the first quarter of this year, China's steel market demand was sluggish, and social and corporate steel stocks were running at high levels. From January to March, the national industrial added value grew at a rate of 11.6% year-on-year, with a year-on-year growth rate of 2.8 percentage points. The growth rate of automobiles, cement and electromechanical products all dropped sharply. The social inventory and corporate inventories of the five steels (rebar, wire, hot rolled coil, cold rolled coil and plate) decreased month by month, but still increased year on year. Destocking is a long-term process. In the same period, the growth rate of fixed assets investment fell by 4.1% year-on-year. The investment in ferrous metal mining and selection industry showed an upward trend, but the growth rate of investment in ferrous metal smelting and rolling processing industry declined. In the first quarter, the investment in the ferrous metal mining industry was 14.8 billion yuan, a year-on-year increase of 26.6%, an increase of 23.7 percentage points over the same period of the previous year; the investment in ferrous metal smelting and rolling processing industry was 71.3 billion yuan, an increase of 8% over the previous year. The growth rate during the same period decreased by 2.6 percentage points. Wang Xiaoqi pointed out that in general, the development phase of the steel industry relying on quantitative expansion has ended. We must accelerate the transformation of development mode, rely more on technological progress, provide high-quality steel products and services to users with low cost and high efficiency, and increase enterprise efficiency. From the economic environment, the industry's meager profit will become the norm, and this severe situation will last for at least three or four years. The sharp rise in the price of raw fuel is one of the important reasons for the difficulty in operating steel companies. From the China Steel Industry Steel Price Index and the Iron Ore Price Index, China's steel prices have risen by 26% in 16 years, while iron ore prices have risen by 500%. From the inside of the industry, steel production enterprises are too much, too scattered, vicious competition, competing to cut prices, the raw fuel price increase factors can not be passed downstream. Only through market competition and industrial restructuring, let a group of uncompetitive enterprises go out, the steel industry can really get out of the woods. "Iron traders who can't make money, and those companies that have seen the industry situation blindly coming in the past few years, should withdraw from the exit. Or through the market to achieve the survival of the fittest." Wang Xiaoqi warned the company. Wang Xiaoqi also pointed out that the Chinese steel industry should still adhere to two resources and two markets. In the supply of iron ore, we must first adhere to the domestic and at the same time make more rational use of international resources. In recent years, domestic iron ore mining capacity has grown at an average annual rate of 25%. Considering the construction period of 2 to 3 years, the mines that have been built since 2008 will gradually develop their capabilities. With the rapid growth of domestic iron ore production, China's iron ore dependence has dropped from 67% in 2010 to around 60% today. Imported iron ore countries are also increasingly diversified. According to Xu Xu, president of China Minmetals Chemicals Import and Export Chamber of Commerce, in 2011, China imported iron ore from traditional second-tier countries, and the total volume of imported iron ore from Canada, Russia, Venezuela, Malaysia, Mongolia, etc. reached 20.04%, close to the proportion of Brazilian mines, to make up for the gap in India's iron ore imports for six consecutive years. From the perspective of the imported iron ore market, from January to mid-April this year, the imported iron ore market showed a small dynamic trend. It is expected that the market consolidation will be longer this year, but it will not be as large as the previous year. It is imperative to establish a credible iron ore price discovery platform in China. Wang Xiaoqi emphasized: "Steel enterprises, iron ore producers and iron ore traders are coexisting in an industrial chain. They should focus on the long-term and establish long-term cooperation and mutual benefit."
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