The price of iron ore in the fourth quarter may usher in the first correction.
According to data provided by Steel House, on August 23, 62% of Australia's fines were quoted at $158 (FOB). As of August 25, the prices of Australia and Brazil remained stable in the price of foreign mines, while prices in India fell slightly.
“My friend who listened to iron ore in the morning said that Australian ore suppliers have linked the transaction index to 25%.†On August 25th, a steel company in Hebei told the Daily Economic News reporter.
According to foreign media reports, Brazilian iron ore supplier Mineracaoe MetalicosSA official said that iron ore prices in the fourth quarter may fall by 8% on the third quarter, "but may be higher than the second quarter. Iron ore in the second quarter of this year The supply price of the short-term agreement for the stone has basically remained at the price of 112 US dollars / ton, and in the third quarter it has risen to about 144 US dollars / ton."
At present, steel mills and ports have sufficient iron ore stocks, and this inventory situation will lead to a reduction in procurement activities in the spot market. Lu Qingyu, an analyst at China Iron and Steel Industry Network, said in an interview that according to the current quarterly pricing mechanism and the futures market, the current round of iron ore price increases will end, and the fourth quarter is a downward trend from the pricing base.
Recently, Rio Tinto’s CEO, Ai Bo, has been interviewed by relevant domestic media. He said that “putting the relationship between improving and Chinese customers in a prominent position†and for the first time proposed a forecast of China's demand.
Steel House analyst Dong Junhao said that in the past, domestic steel companies did not officially accept the agreement price in the second and third quarters. Even if the price fell in the fourth quarter, the meaning of the negotiations actually existed in name only. "The current import prices are based on the price of Japan and South Korea, but the quarterly mine price negotiated between Japan and South Korea is based on China's spot mine price."
Dong Junhao believes that the price drop will reduce the procurement cost of steel mills in the later period. However, "in the absence of a certain effective mechanism for the negotiation of ore that is recognized by the Chinese, the procurement of steel mills may still be confusing."
The reporter learned that at present, the ore price market is divided into three methods: reference to the Japanese and Korean quarterly prices, month-end pricing, and shipping pricing. But for steel mills, a longer-period pricing principle guarantees continuity of production and stability of quality.
The three major mines seem to be more arbitrary to Chinese steel companies. "Before, I talked with China first. After talking about it, I talked to Japan and South Korea. Now I don't need to negotiate with China. They are all broken." The steel company said.
According to Zhu Xi'an, an analyst at "My Steel" network, if steel prices do not fall as the first half of the year, China will have difficulty in the price negotiations in the fourth quarter. "The supply and demand of iron ore in the short term is very high. Difficult to change, can only rely on the decline in steel prices, steel mills to reduce production to pressure the miners."
According to data provided by Steel House, on August 23, 62% of Australia's fines were quoted at $158 (FOB). As of August 25, the prices of Australia and Brazil remained stable in the price of foreign mines, while prices in India fell slightly.
“My friend who listened to iron ore in the morning said that Australian ore suppliers have linked the transaction index to 25%.†On August 25th, a steel company in Hebei told the Daily Economic News reporter.
According to foreign media reports, Brazilian iron ore supplier Mineracaoe MetalicosSA official said that iron ore prices in the fourth quarter may fall by 8% on the third quarter, "but may be higher than the second quarter. Iron ore in the second quarter of this year The supply price of the short-term agreement for the stone has basically remained at the price of 112 US dollars / ton, and in the third quarter it has risen to about 144 US dollars / ton."
At present, steel mills and ports have sufficient iron ore stocks, and this inventory situation will lead to a reduction in procurement activities in the spot market. Lu Qingyu, an analyst at China Iron and Steel Industry Network, said in an interview that according to the current quarterly pricing mechanism and the futures market, the current round of iron ore price increases will end, and the fourth quarter is a downward trend from the pricing base.
Recently, Rio Tinto’s CEO, Ai Bo, has been interviewed by relevant domestic media. He said that “putting the relationship between improving and Chinese customers in a prominent position†and for the first time proposed a forecast of China's demand.
Steel House analyst Dong Junhao said that in the past, domestic steel companies did not officially accept the agreement price in the second and third quarters. Even if the price fell in the fourth quarter, the meaning of the negotiations actually existed in name only. "The current import prices are based on the price of Japan and South Korea, but the quarterly mine price negotiated between Japan and South Korea is based on China's spot mine price."
Dong Junhao believes that the price drop will reduce the procurement cost of steel mills in the later period. However, "in the absence of a certain effective mechanism for the negotiation of ore that is recognized by the Chinese, the procurement of steel mills may still be confusing."
The reporter learned that at present, the ore price market is divided into three methods: reference to the Japanese and Korean quarterly prices, month-end pricing, and shipping pricing. But for steel mills, a longer-period pricing principle guarantees continuity of production and stability of quality.
The three major mines seem to be more arbitrary to Chinese steel companies. "Before, I talked with China first. After talking about it, I talked to Japan and South Korea. Now I don't need to negotiate with China. They are all broken." The steel company said.
According to Zhu Xi'an, an analyst at "My Steel" network, if steel prices do not fall as the first half of the year, China will have difficulty in the price negotiations in the fourth quarter. "The supply and demand of iron ore in the short term is very high. Difficult to change, can only rely on the decline in steel prices, steel mills to reduce production to pressure the miners."
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