Although the "crazy stone" is hard to reproduce, the challenges faced by the steel industry in China have not diminished. The reason is that the fluctuation range of iron ore has greatly increased. Statistics show that the price of steel has only dropped by 20% from the high point to the low point, while the price of iron ore has dropped by more than 40%. The ups and downs of mineral prices make it very difficult to control the cost of steel mills.
"If the mine price only rises unilaterally, we can also deal with it by increasing inventory. Mineral prices have risen and fallen, jumping up and down, and purchasing work is even more troublesome. " A person from a steel company said. There are two figures of "100 million tons", which reflect the dilemma of steel mills in cost control:
First, the port inventory of iron ore dropped from 654.38 billion tons at the peak to more than 80 million tons. Low inventory operation, of course, avoids the impairment loss when raw material prices fall, but it also requires steel mills to be flexible to the fluctuation of ore market.
Second, iron ore derivatives trading tends to be active, and financialization has obviously accelerated. Up to now, the overseas iron ore swap transaction volume is close to 654.38 billion tons. Among them, financial institutions account for 60%, and some international investment banks are also involved in speculation. Domestic steel mills are limited by overseas risk management and control, accounting for only 5%.
Facing the risk of two-way fluctuation of iron ore, all parties are actively seeking solutions. In the fourth quarter, the National Development and Reform Commission held a meeting, pointing out that under the environment of gradually sufficient and diversified iron ore supply and rapid development of various pricing methods, the conditions for launching iron ore futures in China are gradually maturing, and reached the view that "it is better to push iron ore futures later than earlier".