In recent years, the monopolistic structure of the international iron ore trade has continued to intensify. International mining giants have seized this opportunity to manipulate the market, dealing a severe blow and significant impact to China’s iron ore industry—and indeed, to the entire steel industry. Particularly in the current environment of low iron ore prices, the global iron ore trading leaders—Vale, Rio Tinto, and BHP—continue to expand production despite the downturn. Their strategic intent is clear: by flooding the market with low-priced goods, they aim to squeeze high-cost mines out of the market and secure long-term, even greater monopoly profits. As the world’s largest user of iron ore, China is the biggest victim of this iron ore market monopoly. Last year, China’s self-sufficiency rate for iron ore fell to... 20% The following is a summary of the current situation: At present, in order to reduce raw material costs, domestic steel mills are extensively using low-grade, substandard imported iron ore, which has had a serious adverse impact on China’s steel industry and iron ore sector. The basic situation is as follows:

1. China’s dependence on imported iron ore continues to rise.

With the rapid development of China's steel industry, demand for iron ore has surged. Although domestic mines have made considerable efforts and the overall scale of the industry has expanded, the growth in iron ore production capacity still lags far behind the growth in steel production capacity, making it difficult to meet demand and driving up the country's reliance on foreign sources. 2014 Annual iron ore imports 9.33 100 million tons, an increase year-on-year. 1.14 Hundred million tons, increase rate 14%；2015 Annual imports 9.53 100 million tons, up year-on-year 2%，2016 Year 1-5 Monthly iron ore imports 4.12 hundred million tons, compared to 2015 Year-on-year growth 9.15% ; Among them: 2014 Year, 2015 Year, 2016 Year 1-5 The proportion of monthly imports from Australia in the total import volume is as follows: 58.7% 、 63.7% 、 62.14% ; The proportion of imports from Brazil in the total import volume is as follows: 18.3% 、 20.15% 、 21.1% ; The share of imports from the two countries in China’s total imports has been... 2014 of the year 77% , rising to 2016 Year 5 Of the moon 83.24% , improved over the past two and a half years 6.24 percentage points. Over the past decade, China’s dependence on foreign iron ore has risen from 2000 of the year 34% Increase to 2015 of the year 84%，2016 Year 1 ~ 2 The month reaches 86.7% The historical high point.

On the other hand, high-quality iron ore resources worldwide are highly concentrated in the hands of overseas mining giants, leading to severe market monopolization, sharp price swings, and increased volatility risks. Over the past decade, during periods of favorable market conditions, these mining giants have significantly driven up ore prices, causing international ore prices to surge. 6 Moreover, huge profits are flowing to foreign mining giants, while domestic steel companies face rising raw material costs. 2 ~ 3 With trillions of yuan in losses, the entire industry has fallen into red ink and become nothing more than “slave labor” for international mining giants, placing it strategically at a disadvantage—a painful lesson indeed.

II. International mining giants are implementing a low-price dumping strategy.

Currently, the international iron ore market is undergoing significant changes, and the benchmark iron ore contract price has... 2014 The average per ton for the year 135 The U.S. dollar plunges to its lowest level. 40 Around the U.S. dollar, with the largest drop nearing 70% However, the three major players dominating the global iron ore trade—Vale, Rio Tinto, and BHP—continue to expand production despite the market downturn. Vale plans to... 2018 The annual output from 3 From 100 million tons to 4.5 100 million tons; Rio Tinto plans to... 2016 The annual output from 2.6 From 100 million tons to 3.6 100 million tons; BHP plans to... 2017 The annual output from 2.2 From 100 million tons to 2.9 Hundred million tons. The three major players are expanding production against the market trend. Although, at first glance, their economic behavior seems illogical, in the long run, it reveals a deeply calculated strategic intent. Their strategy is as follows: During economic booms, they aggressively drive up mineral prices to reap exorbitant profits; during economic downturns, they implement a “price-cutting-and-clearance” tactic, excessively depressing mineral prices. Once domestic mines have halted production and reduced capacity, they wait for the right moment to raise prices again and reap huge profits. This “game” has already been played twice.

The capacity expansions by the three major players have directly led to an oversupply of iron ore and a short-term surplus, causing international iron ore prices to decline steadily. According to the China Iron Ore Price Index, 2014 Iron ore imports at the beginning of the year ( 62% The CIF price for fine ore is 133.11 U.S. dollar / Ton, year-end 70.38 U.S. dollar / ton, 2015 Year-end 42.6 U.S. dollar / ton, 2016 Year 5 End-of-month price 49.96 U.S. dollar / ton, from 2014 From the beginning of the year to 2016 Year 5 At the end of the month, it decreased. 83.15 U.S. dollar / tons, with a decrease of 62.47% 。2014 Year, 2015 Year, 2016 Year 1-5 Monthly iron ore imports ( 62% Average CIF price of fine ore 96.69 U.S. dollar / ton, 54.85 U.S. dollar / ton, 51.99 U.S. dollar / tons, with year-on-year declines of: 29.81% 、 43.3% 、 12.95% This year 1-5 Monthly import prices of iron ore have been fluctuating at low levels, showing a slight increase compared to last year’s trough. However, the trend of oversupply is unlikely to change in the foreseeable future. According to relevant data, newly added production capacity from mainstream international mines will continue to come online, and the strategy of maintaining low-price sales and using profits to gain market share will persist.

3. The survival of China’s iron ore industry is becoming increasingly difficult.

Currently, iron ore prices are declining. In the short term, this has reduced the cost of imported iron ore, providing some relief to steel companies facing operational pressures. However, low ore prices will make it more difficult to secure financing for domestic iron ore development projects, leading to a decline in investment and a shrinking of project scales, which will deal a significant blow to China’s iron ore industry.

1. The scale of iron ore production is accelerating its contraction. Due to the continuous encroachment of low-priced imported ores on the market, Chinese iron ore enterprises are increasingly being forced to withdraw from the market. 2014 At the end of the year, 2015 At the end of the year, 2016 Year 5 The number of mining enterprises above designated size at the end of the month is as follows: 3447 one, 3128 one, 2335 The number of enterprises exiting the market has been increasing year by year. 2015 Year after year, withdraw. 329 one, 2016 Year 5 month to exit 793 First, the iron ore industry is struggling to survive. As the industry continues to shrink, iron ore production keeps declining. 2014 Year, 2015 Year, 2016 Year 1-5 Monthly crude iron ore production in China 14.96 hundred million tons, 13.81 hundred million tons, 4.71 hundreds of millions of tons, with year-on-year growth rates in production分别为 3.9% 、 -7.7% 、 -2.7% 。

2. Iron ore enterprises continue to suffer losses. As 2014 With the increase in annual iron ore imports and the entry of iron ore prices into a downward trend, industry profits have plummeted, iron ore companies continue to suffer losses, and their survival is becoming increasingly difficult. 2014 Year, 2015 Year, 2016 Year 1-5 The year-on-year growth rates of operating revenue for monthly black metal mining and beneficiation enterprises were as follows: -4.3% 、 -20.7% 、 -9.9% ; Total profit year-on-year growth rate -23.9% 、 -43.9% 、 -10% 。

Key monitored large and medium-sized mining enterprises 2014 Year, 2015 Year, 2016 Year 1-5 The manufacturing costs of monthly iron concentrate (weighted average, the same below) are as follows: 417.93 Yuan / ton, 349.08 Yuan / ton, 312.94 Yuan / Ton, down year-on-year 4.42% 、 16.47% 、 14.38% ; Mining companies have been actively implementing cost-reduction and efficiency-enhancing measures, with the intensity of cost cuts continuing to increase this year. 1-5 The unit manufacturing costs of monthly iron ore concentrate, open-pit mining, and underground mining are all lower than those of ten years ago. 2005 Annual unit manufacturing cost 3.6% 、 22.8% 、 2.5% However, due to the natural limitations imposed by resource endowments, a substantial reduction in costs cannot reverse the current loss situation.

Key monitored large and medium-sized mining enterprises 2014 Year, 2015 Year, 2016 Year 1-5 Monthly main business revenues are as follows: 879.6 100 million yuan, 586.51 100 million yuan, 208.44 100 million yuan, year-on-year growth rate -12.6% 、 -33.1% 、 -21.6% ; Total profits were as follows: 47.45 100 million yuan, -79.09 100 million yuan, -25.92 100 million yuan, year-on-year growth rate -38.1% 、 -266.7% 、 -25.92% 。

3. The sharp decline in investment seriously threatens subsequent production capacity. As imported iron ore has impacted China’s iron ore industry, investment willingness has significantly declined. 2014 Year, 2015 Year, 2016 Year 1-5 Fixed-asset investments in the black metallurgy mining and beneficiation industry for the month were as follows: 1690.2 100 million yuan, 1365.7 100 million yuan, 315.3 hundred million yuan, with year-on-year growth rates in investment being: 2.6% 、 -17.8% 、 -24.5% ; Private investment amounts to 1504 100 million yuan, 1181 100 million yuan, 240 100 million yuan, year-on-year growth rate 8.6% 、 -21.4% 、 -32.7% , ranking first among all industries nationwide in terms of the magnitude of decline, and also recently... 10 Negative growth for the first time in years. Due to a decline in investment, 90% The adjustment, postponement, and stagnation of newly built mines have led to a decline in domestic mine production capacity, a trend that is accelerating.

Currently, the number of people employed in China's iron ore mining and beneficiation industry has reached... 98 Ten thousand people, with annual main business revenue reaching 9000 Around 100 million yuan, with national tax and fee revenue approximately... 1300 Billion-dollar-scale supporting industries and mining-area service sectors are already enormous. If we allow domestic iron ore enterprises to go bankrupt unchecked, it will not only lead to... 1 Investment losses exceeding one trillion will also lead to extensive land occupation and environmental damage, exposing the country to significant environmental risks and imposing hefty remediation costs.

Moreover, if we allow a large influx of low-priced imported ores unchecked, it will easily lead to the mistaken belief that "it's better to buy ores than to run mines," thereby shaking the principle of "relying on domestic resources." Over the past decade, precisely under the influence of this mindset, domestic mines have been pushed to the brink of bankruptcy, enabling international mining companies to seize the opportunity to monopolize and manipulate the market, posing a grave threat to the security of our country’s steel industry and causing substantial economic losses. Therefore, from a long-term and holistic perspective, we must carefully coordinate the development and utilization of both imported and domestically produced ores, firmly adhere to the strategy of relying on domestic ore development, and maintain a reasonable proportion of domestically sourced ores.

IV. The extensive use of low-quality imported ores has led to severe environmental impacts.

To reduce production costs, domestic steel companies have been extensively using high-impurity, low-grade imported iron ore, leading to an overall decline in the quality of iron materials fed into blast furnaces. The adverse effects include: first, increased energy and resource consumption—according to estimates, as the grade of imported ore declines... 1 Percentage point, increased iron ore consumption per ton 30 Kilograms, fuel consumption increases 8-12 Kilograms, annual pig iron production 7 Calculated at the level of hundreds of millions of tons, the steel industry will see its total costs increase by nearly... 34-50 hundred million yuan. Second, pollutant emissions have increased—each year in China, for every one-percentage-point increase in sulfur content in imported high-pollution, low-grade iron ore, the associated emissions rise accordingly. 0.01% Sulfur dioxide emissions have increased. 0.18 kilogram / Tons: Sulfur Dioxide Emissions from Steel Enterprises Increase 17.1 Ten thousand tons, with economic losses caused by environmental damage reaching as high as... 35 hundred million yuan. Emissions of pollutants such as nitrogen oxides, particulate matter, carbon dioxide, and heavy metals have also increased significantly, and the excessive content of harmful elements poses a substantial threat to the quality of steel products. While using low-grade iron ore may indeed reduce production costs to some extent on the surface, this cost reduction is achieved without factoring in environmental protection expenses. Moreover, the environmental protection levels among China’s various types of steel enterprises differ considerably. Some enterprises appear to gain certain benefits from using low-grade iron ore, but in reality, these benefits are more attributable to their neglect of environmental costs than to any genuine economic advantage. This situation is unfair to those enterprises that strictly adhere to national environmental standards—objectively, it amounts to “bad money driving out good.” Therefore, prohibiting or reducing imports of low-quality iron ore and focusing on developing domestic resources to increase the proportion of domestically produced ore is not only necessary to counter international monopolies and safeguard China’s economic and social interests, but also essential for ensuring the healthy and sustainable development of China’s domestic iron ore industry.

In short, if the current situation is allowed to continue unchecked, China’s dependence on foreign iron ore will further increase, and our country will completely lose its voice in the iron ore market, seriously threatening national industrial and economic security. To protect our own resource development, counter the monopolistic power of mining giants, and ensure the security of both the steel industry and the nation’s overall industrial economy, it is imperative—and cannot be delayed—that antidumping measures be imposed on imported iron ore. While imposing antidumping duties on imported iron ore may lead to a temporary rise in ore prices and an increase in steelmaking raw material costs, in the long run, such measures will promote the development of domestic mines, help maintain a balanced and healthy development of the entire steel industry chain, enhance China’s ability to regulate the entire value chain, strengthen our influence in the iron ore market, and safeguard industrial and economic security—thus holding significant strategic importance.