Domestic steel companies have seen very modest profits. According to industry insiders, looking back at the past, overseas capital—whether in the spot market or the futures market, and regardless of whether iron ore prices were rising or falling—has consistently reaped substantial profits. In contrast, Chinese enterprises still lack sufficient capacity to effectively use tools such as futures contracts to hedge against price volatility risks.

　　Domestic steel companies have very little profit.

　　From the perspective of industry insiders, looking back at the past, overseas capital—whether in the spot market or the futures market—and regardless of whether iron ore prices were rising or falling—has consistently reaped substantial profits. In contrast, Chinese enterprises still lag significantly behind in their ability to use tools such as futures contracts to hedge against price volatility risks.

　　4 Moon 2 Today, the international spot price of iron ore fell below... 50 U.S. dollar / Ton, hitting a ten-year low; meanwhile, China’s iron ore futures have also been falling consecutively. 6 Heaven.

　　In the context of weak demand in China, nearly all parties have expressed concern about the future outlook for iron ore prices. Chen Xu, Deputy General Manager of the Investment Consulting Department at Guodu Futures, told a reporter from the Securities Daily during an interview: “ The futures market has a certain degree of forward-looking nature, or rather, it leads the trend of the spot market. ”。

　　But from another perspective, people are hoping that the decline in raw material prices could indirectly boost the profitability of the domestic steel industry. Perhaps it is precisely for this reason that... 4 Moon 2 During the day session, A The steel and iron sector saw widespread gains. By the close of trading, Hangang Steel Shares hit the daily limit up, while Guisheng Shares and Jinling Mining both recorded gains exceeding... 9%。

　　However, Shen Meng, Executive Director of Shangsong Capital, doesn't see it that way. He previously told a reporter from the Securities Daily that... “ Even with a sharp drop in iron ore prices, the profits that it can bring to domestic steel companies remain negligible. The core issue lies in insufficient demand for steel in the domestic market, while supply has not noticeably decreased. ”。

　　China, Australia

　　 “ Judgment ” The life and death of iron ore

　　The decline in iron ore prices is clearly driven by a variety of factors. Among these, it is widely acknowledged that China—the world’s largest consumer market for iron ore—is undergoing a transformation.

　　First, the economic downturn has triggered a severe shortfall in demand in the steel market. Second, the sharp rise in environmental protection costs has prompted an increasing number of domestic steel mills to adopt measures such as reducing production, limiting output, or even halting operations altogether. Meanwhile, as iron ore prices continue to fall—and are expected to decline further—steel companies are being forced to keep their inventory levels at lower levels.

　　Relevant data from the National Bureau of Statistics show that our country... 3 Official Manufacturing Purchasing Managers’ Index for the month ( PMI ) Rise to 50.1 slightly higher than estimated 49.7 However, it had been below for two consecutive months prior to this. 50 And HSBC ( HSBC ) /Markit Jointly released China 3 Monthly manufacturing PMI The terminal value is 49.6 , hitting a three-month low (generally speaking, when... PMI Greater than 50 At that time, it indicates that the economy is developing; when... PMI Less than 50 At that time, it indicates the economy is in recession.

　　In addition to the changes occurring in the Chinese market, every move made by Australia—the world’s largest exporter of iron ore—also influences the trend of iron ore prices. Data shows that... 2014 Last year, China’s imports of iron ore from Australia accounted for nearly... 60%，2013 This year's data is 50.9% 。

　　According to relevant reports, the Reserve Bank of Australia ( RBA ) will be 4 Moon 7 A monetary policy meeting will be held today to decide whether to cut interest rates.

　　One major reason for hoping that lowering interest rates will boost trade stems from the sharp decline in the price of Australia’s most valuable export commodity—iron ore. A set of preliminary estimates indicates that for every $1 drop in iron ore prices... 10 U.S. dollar / Tonnes, Australia's national budget will be reduced. 30 A$100 million. Meanwhile, iron ore prices have now accumulated a decline. 70% This could reduce Australia’s approximately 300 AUS$100 million in tax revenue.

　　However, according to Zhang Lin, an analyst at Lange Steel Network, Australia is currently grappling with whether or not to... “ Promote iron ore exports by lowering interest rates. ” remains hesitant on the issue, and it really is difficult to make a decision.

　　She told a reporter from the Securities Daily, FMG (The third-largest iron ore exporter in Australia) and Rio Tinto Group (one of the “Big Three” in the iron ore industry) have expressed two distinct positions. Among them, FMG Calls for production caps; while Rio Tinto CEO Walsh ( Sam Walsh It stated that limiting iron ore production is not in Australia’s national interest, dismissing suggestions that such restrictions could help boost iron ore trading prices. ”。

　　All sectors are pessimistic.

　　Iron ore prices rebound in the short term.

　　In summary, against the backdrop of oversupply, people don't seem to believe that iron ore prices will rebound. “ Reversal ”。

　　The vast majority of investment research firms believe that, as the seasonal maintenance period comes to an end and supply from Australia and Brazil begins to increase, there is no reason to think that iron ore prices have already reached their bottom. They even predict that iron ore prices will remain at their current levels for a considerable period of time. 40 U.S. dollar / Tons to 45 U.S. dollar / At the level of tons.

　　However, capital markets are often happy to... “ Surviving Adversity ” Compared to the current insufficient demand in the Chinese market and the increased supply from Australia and Brazil, investors have found that China’s proposed... “ The Belt and Road ” Strategies, as well as exports of high-speed railways, are very likely to boost steel demand.

　　However, Zhang Lin doesn't seem to think so. In her reply to a reporter's interview, she said that even according to the rules of the secondary market, “ The ranking of beneficiaries in the steel sector should also be placed in the second tier. ” The implication is that high-speed rail, as well as projects still in the strategic phase, ... “ The Belt and Road ” And this is insufficient to provide the demand needed to absorb the supply in the steel market.

　　However, it’s worth noting that data released by the National Bureau of Statistics show that... 2014 Year 1 The month is coming. 11 In the month, China's steel exports reached as high as 8361.23 Ten thousand tons, up year-on-year 46.78% ，12 The month saw even greater steel exports. 1017 Ten thousand tons, up year-on-year 89.17% And on this basis, people believe that relying on... “ The Belt and Road ” Driven by favorable national policies, steel exports are still expected to perform well this year.

　　In addition to the market landscape, Chen Xu emphasized to the reporter that... “ Chinese enterprises have a significant gap compared to their foreign counterparts in their ability to use tools such as futures contracts to hedge against price volatility risks. ”。

　　Review over 10 The fluctuations in iron ore prices over the past year have attracted overseas capital. “ Whether in the spot market or the futures market, and regardless of whether iron ore prices are rising or falling, enormous profits have been reaped. This is highly worthy of vigilance. ” Chen Xu said.