This year, the biggest increase in commodities is it!

category:Finance
 This year, the biggest increase in commodities is it!


Recently, the price of iron ore has reached a new high in nearly seven years. By the end of the afternoon of December 3 in China, the main contract of iron ore closed at 937 yuan / ton, reaching a maximum of 941.5 yuan / ton within the day, which reached a new high since early December 2013, with a cumulative increase of 44.93% during the year.

Strong toughness of steel demand stimulates iron ore price

Vivek DHAR, commodities analyst at the Federal Bank of Australia, said the rise in iron ore prices was mainly due to strong demand from Chinas infrastructure projects, real estate and manufacturing industries.

Due to the rise in steel prices, Chinas steelmaking margins are still robust, strengthening iron ore demand. A small drop in iron ore inventories at Chinese ports last week also boosted iron ore prices, vivik Dahl said

Wind data shows that since November, iron ore port inventory has continued to decline. As of last week (the week of November 27), iron ore inventory of 30 major ports in China was 117 million tons, down 1.5% month on month.

In recent years, Australia, Brazils iron ore shipping volume has decreased, resulting in some port inventory supply tension. Jin Lianchuang steel analyst Xu Cuiyun said in an interview with Shanghai Securities News.

It is worth mentioning that with the advent of the traditional winter storage season in the iron and steel industry, the industry believes that there is still some support for iron ore prices, but the rise is difficult to continue to the medium and long term.

In the near future, the toughness of steel demand is still strong, and high profits will stimulate steel mills expectation of replenishment in winter, which will support iron ore prices in the short term. Xu Cuiyun said, however, from the supply side, the shipment volume of the four overseas mines is still at a high level year-on-year, and the later supply will be more and more relaxed, and the accumulation of iron ore in domestic ports is the general trend.

As the end market, the demand for construction steel also shows fatigue. Haimin, an analyst of Zhuo Chuang information construction steel, said in an interview with Shanghai Securities News that the weather gradually turned cold in December. At present, the northeast, northwest and other places have basically stopped working, and the consumption of construction steel has decreased. The winter storage season of building materials market may open in the middle and late December, but the overall willingness of replenishment in the industry is insufficient. It is expected that the overall construction steel market will show a slight downward trend in December.

There are hidden worries in the soaring iron ore

Iron ore, known as the grain of steel, is the raw material for the survival of the whole steel industry, and its sharp rise in price will also bring hidden worries.

Qu Xiuli, vice president and Secretary General of China Iron and Steel Industry Association, said at the Lange steel 2020 annual meeting held at the end of November that iron ore prices are now more than 40% higher than at the beginning of the year, while steel prices have only risen by 6% in the same period. On the whole, the benefits of steel enterprises have declined. In the first 10 months, the profits of enterprises have decreased by 4.5% year on year, and the average profit margin of sales in the industry has dropped to 4.1%. In addition, long-term dependence on imports of iron ore is also a big problem. Li Xinchuang, Secretary of the Party committee and chief engineer of the Institute of metallurgical industry planning and research, said at the 2021 steel industry chain Development Summit Forum held at the end of November that Chinas iron ore dependence on foreign countries had broken through the 80% mark and remained high. At present, there are still some problems in the construction of raw material supply chain and supply guarantee system in Chinas iron and steel industry. We should speed up the formation of domestic and foreign dual cycle iron ore security pattern, stabilize domestic circulation and promote the formation of overseas circulation. Editor: Lin Jian source: Shanghai Securities News Author: Chen Yukang editor in charge: Zhong Qiming_ NF5619

Qu Xiuli, vice president and Secretary General of China Iron and Steel Industry Association, said at the Lange steel 2020 annual meeting held at the end of November that iron ore prices are now more than 40% higher than at the beginning of the year, while steel prices have only risen by 6% in the same period. On the whole, the benefits of steel enterprises have declined. In the first 10 months, the profits of enterprises have decreased by 4.5% year on year, and the average profit margin of sales in the industry has dropped to 4.1%.

Li Xinchuang, Secretary of the Party committee and chief engineer of the Institute of metallurgical industry planning and research, said at the 2021 steel industry chain Development Summit Forum held at the end of November that Chinas iron ore dependence on foreign countries had broken through the 80% mark and remained high. At present, there are still some problems in the construction of raw material supply chain and supply guarantee system in Chinas iron and steel industry. We should speed up the formation of domestic and foreign dual cycle iron ore security pattern, stabilize domestic circulation and promote the formation of overseas circulation.

Editor: Lin Jian