Sunday, 16 Jan 2011
Baosteel Group Chairman Mr Xu Lejiang recently in the interview said “I know you most want to talk about? Iron ore negotiations. Speaking of China Steel Industry, it is indeed a topic around not in the past.”
In Mr Xu Lejiang view the subject of iron ore, like side prism which reflects different aspects of China steel industry:
1. Iron and steel industry for many years without the rapid development of China macroeconomic stability will not get the industrial food strong support
2. Excessive rate of development of steel industry, but also to the industry repeatedly encountered a bottleneck mouth
3. Ore price negotiations face difficulties, eliminate backward production capacity difficult, industry concentration falling instead of rising, core technology and the introduction of The Road barrier.
He said "Extensive development of China steel industry, the old road has come to head, mouth bottleneck is a breakthrough. In steel production has accounted for more than half the global total today, China's steel industry from large to strong adjustment and transition will certainly be the result.”
From the iron ore difficult situation in inverted extract a competitive edge, International iron ore pricing mechanism of change is this year hits one of the highest financial events. Mr Xu Lejiang said is the world's three major Mine Monopoly enterprises with stage in short supply, resulting in such a situation.
He said “Late last century, the global iron ore supply exceeding demand, integration of the advantages of the three ore mines were relatively monopolistic market position. This century, the Chinese steel output rose rapidly from 100 million tons last year, 568 million tonnes Global steel production rose from 700 million tonnes more than 1.3 billion tonnes. Mines and steel mills as the upstream and downstream, the development pace of inconsistent supply and demand balance for the time being to break the iron ore price agreement mechanism for long-crumbling.”
He said “In this difficult situation of iron ore, on one hand of course, there are three major mines just today, not tomorrow, seeking short term interest factor, which will be the test of history is not permanent, but the other On the one hand, also reflects the low concentration of Chinese iron and steel industry, steel demand in different inconsistency issues such as trade order will not ring true.”
He added “The ore pricing mechanism changes, the Baosteel and other Chinese steel mills have brought no small impact on the future ownership of the steel to different starting line in a competition is a challenge and an opportunity make their own forced out really competitive, reflected. Similarly, the hot metal to produce different quality, different value added products. Who steel making capacity, who will be able to produce good products, you can win the market competitiveness.”
He concluded “Forced mechanism will extract a Chinese steel industry walk up the resources of security system. Baosteel as early as the beginning of this century mining downturn, the CVRD and Rio Tinto and other miners venture Cooperation Lock mine some interest, to some extent the interests of achieving a hedge. Ore prices skyrocketing in the present case, there will be new investors into the mining industry and a round of going out the formation of new iron ore supply capacity, the global ore trade pattern will return to a win win situation.”
Courtsey news by business.ezinemark.com
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