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China Steel Association competes for the iron ore index, the three major mines are allegedly manipulated
From resisting the index of iron ore to starting to formulate the "China Iron Ore Price Index", the concept and actions of the China Iron and Steel Association have undergone a 360-degree transformation. However, this also means that China will also join the war of iron ore index battles. "In today's international iron ore gradual indexation and financialization, China should also launch its own price index." China Steel Association insiders said. Whether the China Iron and Steel Index to be launched by China Steel Association can be authoritative, how to be recognized by international miners has been worried about the industry. China's index debuted Due to China's failure in international iron ore negotiations and the gradual indexation of international iron ore trading, iron ore prices have been rising. According to the data, in the first four months of this year, the average price of imported iron ore in China was US$157.6/ton, a year-on-year increase of 57%. According to the iron ore import volume of 230 million tons in the same period, the price of iron ore alone will increase the cost of the Chinese steel industry by nearly 13.2 billion US dollars (equivalent to 85.7 billion yuan). An industry insider said that the National Development and Reform Commission had previously asked China Steel Association to take out China's iron ore price index as soon as possible to strengthen the right to speak in iron ore price negotiations, and this data also appeared for China Steel Association. The determination of the China Iron Ore Price Index was made. Li Xinchuang, president of China Metallurgical Industry Planning and Research Institute, said that China Steel Association is planning to establish an authoritative Chinese iron ore price index. The upcoming domestic price index will be launched, and the import price index will be launched in the future. Insiders of the China Iron and Steel Association also said that in order to avoid iron ore speculation, the "China Iron Ore Price Index" was formulated from the internal mine to build a price index platform for the domestic market. It is understood that there are many institutions in China that have set their own iron ore price index as a joint metal network of one of the more influential Chinese iron ore price index institutions, and the Umetal iron ore comprehensive index issued by In domestic and foreign markets, the internal mine price is the weighted average price of the main iron ore producing areas in China. The external ore price is based on the top eight major ports of China's iron ore throughput. Each port is an index, then In combination with the price, the Chinese port spot iron ore price index, which was launched, has a 62% choice of ore grade. Mys-teel, a steel information agency different from the joint metal network, has a choice of 63.5% for both internal and external minerals, while the TSI index currently has 62% and 58% iron fines, respectively, and CFR to Chinese ports. (onshore) price changes daily; MBIO index is based on China's Qingdao Port (CFR) 62% grade iron ore, based on all 56% to 68% grade iron ore to 62% grade. The Platts index is calculated on the CIF price of the Qingdao MTR ore spot mine, which is 62% of the finished product. “The China Iron Ore Price Index formulated by China Steel Association may become China’s mainstream official index.†Hu Yanping, an analyst at China United Steel Corporation, said: “The China Iron and Steel Association’s iron ore price index must first determine what kind of ore grade to choose. As a benchmark, the data collection is the same as that of Other index institutions. The internal mining index is mainly from the main iron ore producing areas in China, and the external mining index will be collected mainly from various ports.†Hu Yanping also said that the price index is not very complicated. The steel association's internal opinions are not much different, and its iron ore price index will be released soon. The question behind the launch is that the three major mines use the Platts index in setting prices, which makes the international iron ore price remain high. This also confirms the statement of the Secretary General of China Steel Association, Shan Shanghua, “Where can The index adopted by the mines is unfavorable to Chinese steel mills.†According to media reports, the China Iron and Steel Association suspects the accuracy of this index. Some people worry that this index may be manipulated by the iron ore giants. It is understood that in April 2010, the ongoing annual negotiation pricing model was forced to change to the quarterly price by the three major mines of Vale, BHP Billiton and Rio Tinto, and BHP Billiton began to change to monthly pricing in January this year, and gradually began to transform into Index pricing. At the same time as the index pricing of the three major mines, the international iron ore agreement price also increased from the iron ore import to the average bank price of 100 US dollars per ton in the first quarter of last year to the average price of iron ore imports to the shore in the first quarter of this year, 156.62. USD/ton, up 60%/ton, up 62.62%, while 77 large and medium-sized steel enterprises sold 840.84 billion yuan in the first quarter, achieving a profit of 24.46 billion yuan and a sales profit of only 2.91%. After the emergence of index pricing, the price of imported iron ore is rising continuously, while the profit of steel enterprises is squeezed very little. In 2010, the total profit of China's steel is less than that of any of BHP Billiton, Rio Tinto and Vale. An insider of China Steel Association told reporters that several international iron ore index institutions are basically based on the integrated iron ore spot market in China, and the collection process and compilation are not transparent. Suspicion. As we all know, it is precisely because of the introduction of iron ore indexization that domestic steel enterprises have the status of “high cost, low profitâ€, and China, as the world’s largest importer of iron ore, has been referring to foreign direct institutions. The release of the data, so makes the call for China's official version of the iron ore price index more and more. A large steel purchaser said: "The index we are referring to is the Platts index, because the three major mines are looking at the Platts index, and it is useless to see other." He Rongliang, an analyst at the China Merchants Productivity Promotion Center, said "The current indexed pricing method cannot fully reflect the real market of China's iron ore market. China Steel Association has launched its own index in a timely manner, intending to fundamentally protect the interests of steel enterprises." It is recognized that there is still difficulty in the implementation of China Railway The ore price index is not an easy task. First of all, we must guarantee the authenticity of the prices it provides, and we must find ways to let international miners accept this index. "China's iron ore price index makes it difficult for the three major mines to accept." Luo Bingsheng, an analyst at China Steel Association, said. At present, the three major international mines control most of the world's iron ore, so it has a great autonomy in the choice of index, and is more inclined to choose an index that is beneficial to itself to operate iron ore. Not only that, but the establishment of China's iron ore price index was mentioned two years ago, and now this program is once again activated, it will also face fierce market competition. Prior to this, due to the monopoly status of the three major mines, the Platts iron ore price index recognized by the three major mines, the TSI index of Global Steel News and the MBIO index of the Metal Guide became the world iron ore price index. Mainstream. In China, the price indices developed by our steel mesh, United Metals and Xinhua News Agency are also favored by domestic traders. He Rongliang said that to become a trading reference index in the market, the credibility must be high and there must be a broad basis for identification. Strictly speaking, this should actually be built by a third party. Independence is a minimum requirement. It cannot be related to the supply and demand sides and other groups, so as to improve the credibility of the index. Some insiders also said that due to the high level of iron ore imported from China, many other iron ore exporting countries have moved, and China has added a lot of choices. Although China’s total iron ore imports have increased, However, the proportion of traditional places such as Brazil and Australia is declining. In the case of supply confirmation, the turning point of iron ore prices is a matter of time. In this turning point, the China Iron Ore Price Index or many of them are implemented.