Excess demand will cause iron ore prices to continue to fall
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Due to the surge in Australian iron ore investment and the decrease in demand in China, some steel mills have adopted a low-inventory operation strategy, and iron ore prices have continued to decline since mid-September. According to the business and industry steel branch, the supply and demand of iron ore will be reversed recently, and iron ore will enter the price decline track. In recent years, Chinese companies have invested in iron ore overseas. Companies in other countries and regions such as Iran, Chile, and Africa are also investing in iron ore in large scale. The three major miners are expanding their scale. By 2015, Vale's production capacity will reach 469 million tons, much higher than the planned production of 332 million tons in 2011; Rio Tinto's production capacity will reach 330 million tons, much higher than the 230 million in 2011. Tons; BHP Billiton's production capacity will reach 300 million tons, much higher than the 150 million tons in 2011. The world's largest steel giant ArcelorMittal Mining Vice President and Chief Commercial Officer said that starting in 2014, global iron ore production capacity will exceed supply. With the large-scale investment in iron ore projects, the large-scale growth of iron ore supply will gradually gradually approach. At the same time, due to the weakening of downstream demand in the real estate and machinery industries, the “Golden September and Silver 10†market of steel products has completely failed, leading to a direct decline in the demand for downstream steel billets such as steel strips and threads. Chen Kai, an iron ore analyst at the Iron and Steel Branch of the business community, said that the current iron ore supply and demand contradiction has become very prominent, and the current iron ore port inventory has reached a record high. According to incomplete statistics, from January to August 2011, the port iron ore inventory has reached 95.26 million tons, up from 71.8 million tons in the same period last year. Information from major domestic ports has been reported. Recently, the price of imported minerals has been falling. 62% of the mainstream price of Indian powder mines has fallen all the way. The current price is approaching the mark of 1,235 yuan/ton. Under the downward trend of the steel market, the willingness of steel mills to control procurement costs has increased significantly, and the import mine market has shown a weak trend. With the decline in the domestic mining market price, the import mine market showed operational pressure, the external disk price was slightly reduced, and the spot price of imported minerals fell slightly. The business community expects iron ore prices to continue to fall in October and November.