Iron ore is difficult to continue "crazy stone"

Since the second half of 2012, iron ore has fallen below US$90/tonne to the lowest point in three years, to the current level of US$123.51/ton, and is still rising. It has soared by 50% in three months, and iron ore has once again staged “crazy Stone" drama. Especially after the ***, the concept of 40 trillion yuan of urbanization investment was introduced, which intensified the rise of iron ore. However, in spite of the rapid increase in iron ore in this short period, most people in the industry believe that iron ore is crazy and difficult to continue.

A few days ago, CRU expects iron ore prices to increase after peaking next year. CRU stated that the expansion of the scale of iron ore mining and production in Australia and Brazil will offset the short-term global iron ore shortages that India and other places have forbidden to export iron ore. Therefore, it is expected that the supply of iron ore in the fourth quarter and next year this year. The amount will continue to rise. While the three major foreign miners maintained high output, while the growth rate of China's GDP and global iron production slowed down, according to the market supply and demand, iron ore will decline after peaking. According to CRU, it is expected that the price of iron ore will reach a maximum of US$128/ton in 2013. It can be seen that iron ore will no longer rise significantly in the later period and will face downside risks.

In addition, the reason that foreign miners are always optimistic about the demand in the domestic market, the strong downstream demand of the domestic steel market will drive the steel market to improve, and our country is highly dependent on the import of iron ore, so the iron ore is so confident. Full increase. However, even if many parties predict that the steel market demand will improve next year, there will not be much bottom for businessmen engaged in the steel trade and trade industry, because the downstream demand next year is not as good as expected.

Although urbanization has become the focus of attention in all walks of life in China, urbanization will boost 40 trillion yuan in investment in the next 10 years. However, the key to promoting urbanization development is where does money come from? In the process of urbanization, whether it is the cost of urbanization of migrant workers or the construction of infrastructure, huge amounts of capital are required to be invested. This contrasts with the difficulties of reducing local government fiscal revenue, bank borrowing difficulties, and debt maturity. . It can be seen that governments in various regions still have many difficulties to overcome in the process of promoting urbanization. And as the planning goals for the next decade, how much will the concept of urbanization be performed next year?

In addition, the Ministry of Housing and Urban-Rural Development said on the 25th that next year it will continue to strictly implement differentiated housing credits, tax policies, and purchase restriction measures, and resolutely curb demand for speculative investment housing. This shows that after the property market will continue to maintain strict control next year, even more efforts will be made to control. The protection of housing, on the 25th from the Ministry of Housing Urban and Rural Development was informed that next year the task of urban security and housing projects is basically built 4.6 million units, 6 million new construction. Compared with the 7 million new projects started in 2012, there was a decrease in 2013. This shows that the protection of housing projects in 2013 will weaken the demand for steel products.

The downstream industry of the iron and steel industry is still sluggish. From January to November, the nationwide shipbuilding completed 50.55 million dwt, a year-on-year decrease of 18.2%; the new ship order was 17.04 million dwt, down 49.4% year-on-year; at the end of November, the number of ship orders held was 113.3 million dwt. , a year-on-year decrease of 30.3%, a decrease of 24.4% from the end of 2011. From these data, the full decline of the shipbuilding industry in 2012 is inevitable. And based on the amount of completion used to estimate the current capacity, the amount of hand-held orders is used to estimate the capacity that can be achieved in the next 1-2 years, and the new orders can predict the capacity after two years. Today, the decline in the three indicators also shows that the decline in the shipbuilding industry may continue for a longer period of time. In addition, the household appliance industry and the automotive industry are facing a huge amount of inventory.

From this we can see that the demand for steel products driven by next year is still not optimistic. At least from the end of this year to the spring of next year, it is still difficult for the North to start outdoor construction. The demand for steel in the South is also declining, and the rapid rise in iron ore is difficult to maintain. In the past two years, China's iron ore import destination has increased from 28 to 67, and bargaining power has also increased. The tightest supply of iron ore has already passed. The trend of ore prices will also begin to look at the trend of steel prices.