How much will the global iron ore supply increase in 2017? About 50 million tons!
In 2017, Rio Tinto, BHP Billiton, FMG, Vale and other four mines will increase their output by 30 million tons. Considering the gradual release of production capacity of Roy Hill, SINO iron ore in China and Australia, and the withdrawal of some high cost mines, it is estimated that the global iron ore supply will increase by about 50 million tons in 2017.
With the substantial growth of iron ore consumption in China, and the domestic iron ore production can not meet the demand, the import of iron ore increased from 148 million tons in 2003 to 1024 million tons in 2016, and the external dependence of iron ore increased from 44.4% to 87.3%. In the future, China's steel industry will still face the challenge of ensuring the safe supply of iron ore.
In the context of the government work report that the "the Belt and Road" construction will be solidly promoted in 2017, how can we seize the opportunity to strengthen the construction of the iron ore security supply guarantee system from a strategic perspective?
From the current situation, the following "three characteristics" of the global iron ore market will exist for a long time.
High concentration of global iron ore trade
At present, the global iron ore supply market is highly concentrated in two countries and four major companies. In 2016, the iron ore exports of Australia and Brazil accounted for about 80% of the global exports, and the iron ore output of the four major mines accounted for about 67% of the global iron ore trade.
The main importing countries of iron ore are China, Japan and South Korea. In 2016, China imported 1.024 billion tons of iron ore, accounting for about 67.4% of the world's total imports; Japan imported 130 million tons of iron ore, accounting for about 8.6%; South Korea imported 79 million tons of iron ore, accounting for about 5.2%. In 2016, the total import volume of the three countries reached 1.233 billion tons, accounting for 81.1% of the global total. (Portal: How much iron ore did we import from Australia, Brazil, South Africa and other countries last year?)
Iron ore market will remain oversupply
In 2017, Rio Tinto, BHP Billiton, FMG, Vale and other four mines will increase their output by 30 million tons. Considering the gradual release of production capacity of Roy Hill, SINO iron ore in China and Australia, and the withdrawal of some high cost mines, it is estimated that the global iron ore supply will increase by about 50 million tons in 2017. While China, as the country with the largest demand for iron ore, has entered the stage of reduced development of the steel industry. From the overall and long-term perspective, it will be an inevitable trend for the demand for iron ore to enter the decline channel. Therefore, from a global perspective, the pattern of oversupply of iron ore will exist for a long time in the future.
China's iron ore is highly dependent on imports
Although the total amount of China's iron ore resources is large, its endowment characteristics of "poor, scattered, fine and miscellaneous" determine its inherent deficiencies in mining conditions, operating costs and other aspects. For example, according to statistics, the average production cost of iron ore in China is about 80 US dollars/ton, nearly four times that of international iron ore giants. The market competitiveness is weak, and the dilemma of "serious excess of inefficient capacity and serious shortage of superior quality capacity" has gradually formed. At the same time, although China's iron and steel industry has stepped into the development channel of reduction, it will still maintain a high level of operation, and the demand for iron ore is still huge. It is estimated that by 2030, China's iron ore dependence on foreign countries will remain above 85%. Therefore, domestic mines can only be used as an effective supplement and strategic reserve for imported mines, and the pattern of highly relying on imported mines is difficult to break in the short term.
China is the world's largest iron ore consumption market, with demand accounting for nearly 60% of the global total. However, the low concentration of China's steel industry, the small scale of overseas equity mines, and the lack of competitiveness have led to China's steel industry's insufficient influence in the iron ore raw material market. Under the trend of short-term iron ore agreements, pricing indexation, and financial transactions dominated by the four mines, iron ore prices fluctuate dramatically, It seriously affects the safe and stable operation of China's steel industry.
On the whole, most of China's high cost mines are closed, the construction of overseas equity mines is stagnant, and the degree of dependence on foreign countries is expanding. Imported iron ores are mainly from Australia and Brazil, and more than 90% of them are marine iron ores, which need to pass through the South China Sea region, with a single transport channel. Therefore, the construction of China's iron ore resource security system is facing severe challenges, and it is extremely urgent to improve the construction of the iron ore resource supply security system.
Suggestions on how to strengthen the security of iron ore resources are as follows: establish the bottom line thinking and stabilize domestic ore production
Through policy support and macro guidance, establish a "white list" of iron ore enterprises, carry out standardized management, support the development of a number of domestic iron ore enterprises with strong competitiveness, improve mine management level, improve the ecological environment, and strengthen the basic guarantee role of domestic iron ore supply through large-scale and intensive development. Increase the proportion of overseas low-cost high-quality equity ore supply
With the help of the national "the Belt and Road" initiative, we will strengthen international cooperation in steel production capacity, realize the "going out" of the entire steel industry chain, build overseas low-cost high-quality iron ore supply bases and increase the proportion of equity ore supply on the premise of forming a mutually beneficial and win-win relationship with countries along the line. Increase scrap supply and reduce iron ore consumption
Speed up the construction of scrap processing and distribution system, and standardize the management of scrap resource flow. We will support the standardized and centralized development of scrapped automobiles, scrapped ships and other scrapped dismantling industries. In the direction of industrialization, productization and regionalization, expand the processing scale and distribution capacity of standardized and standardized scrap processing and distribution enterprises around the construction and layout optimization of scrap processing demonstration bases. Promoting the establishment of a pricing mechanism that objectively reflects the relationship between supply and demand
At present, the iron ore market is in a period of reform, which is also an opportunity to promote the optimization of the pricing mechanism. To promote the optimization of pricing mechanism, first, promote the diversification of iron ore pricing methods; Second, actively promote the healthy development of iron ore futures and iron ore trading platforms, give full play to their price discovery functions, and prevent excessive financial speculation; Third, it is suggested to carry out linkage research on steel price and ore price, and promote the establishment of an iron ore pricing mechanism that objectively reflects the relationship between supply and demand and realizes win-win development of upstream and downstream.
Innovate the mode and improve the "going global" service guarantee mechanism
First, innovate the overseas iron ore investment mode; Secondly, we should strengthen policy coordination and support in economy and trade, finance and taxation, foreign exchange, customs, foreign affairs, etc; Thirdly, strengthen the risk monitoring and early warning mechanism of overseas iron ore exploration and development; Finally, we should actively cultivate senior management talents and technical talents of the compound mining industry.