Chinese iron ore price index will be released next month

Yesterday, China Iron and Steel Association, China Minmetals Chamber of Commerce, and Metallurgical Mines Association announced the official launch of the Iron Ore Price Index (CIOPI) in Beijing. Starting from October, China's iron ore price index will be publicly released on a weekly basis. The industry believes that the index will become the benchmark for the domestic iron ore price index, laying the foundation for China's future struggle for iron ore pricing power.

The index will be more authoritative

On the morning of September 20, the China Iron and Steel Association, together with the China Minmetals Chemicals Import and Export Chamber of Commerce and the China Metallurgical and Mining Enterprises Association, held a press conference to announce the official launch of the China Iron Ore Price Index. According to the plan, China's iron ore price index will be publicly released on a weekly basis starting from October. Due to the National Day holiday, the industry expects the first release of China's iron ore price index on October 10, the first Monday after the small holiday.

According to reports, the China Iron Ore Price Index (CIOPI) issued by China is composed of two sub-indexes, the Domestic Iron Ore Price Index and the Imported Iron Ore Price Index. The month price is the base (100 points).

Zhu Jimin, president of China National Iron and Steel Association and chairman of Shougang, said that the selection was based on the price in April 1994, mainly for the purpose of publishing the China Steel and Price Index first published by China Steel Association and the International Steel Price Index announced by the British Institute of Merchandise. Consistent.

For the introduction of this index, Xu Xiangchun, “My Steel” consulting director, said that the Chinese iron ore price index is similar to the iron ore index previously launched by some domestic consulting agencies. “However, the iron ore of China Iron and Steel Association The stone price index is more comprehensive in information collection, which is doomed to make the index more authoritative."

The Commercial Daily reporter learned from the China Iron and Steel Association that the data on the "domestic iron ore price index" in the Chinese iron ore price index was collected as the tax-inclusive price for iron concentrate market transactions in the major producing areas of the country, while the "imported iron ore price index" The scope of data collection is the dry base powder ore cif price reported by the member units.

According to Wang Guoqing, deputy director of the Lange Steel Network Research Center, there are about 112 domestic companies that have iron ore import qualifications, of which 72 are iron ore importers and 40 are traders. Iron ore imports are managed using imported qualifications and managed by China Steel Association and Minmetals Chamber of Commerce. "Therefore, the price of iron ore imported from China Iron and Steel Association and China Minmetals is the most authoritative, and the metallurgical mine association manages domestic mining companies. The source of domestic ore prices is relatively reliable," said Wang Guoqing.

Xu Xiangchun also emphasized that "the data collected by the imported iron ore price index will have more advantages than the indices launched by other domestic institutions, and the information will be more objective, comprehensive and continuous."

In fact, the China Iron Ore Price Index formulated by the China Iron and Steel Association has already begun trial operation in August. Zhu Jimin said that since the trial operation, the sample collection coverage has reached more than 95% of the import volume. A sample of the domestic iron ore price index collected tax-inclusive prices for the iron ore concentrate market, covering the nation's main iron ore producing areas, and its 2010 production accounted for 93% of the nation's iron ore output.

Pave the way for pricing rights

At present, the global iron ore market is basically monopolized by the three giants such as Vale, Rio Tinto and BHP Billiton. What impact will the introduction of the iron ore price index in China have on the current iron ore market pattern?

Xu Xiangchun told the Commercial Daily reporter that “the price index directly reflects the changes in prices and can be visually compared to the “thermometer”. The market can observe the price changes through this “thermometer”. Although this “thermometer” cannot reverse the current three major The monopoly structure of the mines, but at least in the process of negotiating prices, we have a tool of our own. Otherwise, even the most basic tools are not available.

Wang Guoqing pointed out that China's imported iron ore reference price index is basically designated by the three major mines, which is undoubtedly more favorable to the seller than the buyer, and this index is relatively objective to reflect the market supply and demand, at least to the buyer and the seller will be fair of.

Zhang Changfu, secretary-general of the China Iron and Steel Association, previously said that this version of the index issued by the China Iron and Steel Association just wants to objectively reflect the status of China's iron ore market.

However, Zhou Wangjun, deputy director of the Development and Reform Commission’s Price Division, pointed out at the press conference yesterday that the current development of the Chinese iron ore price index is a “forceless choice”. “At present, the iron ore market has been seized by the three giants, resulting in a serious shortage of Chinese iron ore companies’ bargaining power. The income of steel companies has been declining.” He pointed out that the government is not directly intervening in the micro economy and hopes to release, guide and regulate the index. Market behavior affects the formation of the expected price of international iron ore and breaks the monopoly market pattern.

The data released at the press conference at the same day shows that in recent years, China’s steel production has grown rapidly, and the dependence on imported iron ore resources has continued to rise, and iron ore prices have continued to rise significantly. In 2010, China's imported iron ore consumption accounted for about 63% of domestic consumption. In addition, in the first eight months of this year, China’s cumulative import of iron ore was 448 million tons, an increase of 42.71 million tons, an increase of 10.6%; the average landed price of imported iron ore was US$164.36/ton, a year-on-year increase of US$44.8/ton. 37.5%

According to the statistics of the China Iron and Steel Association, due to imported iron ore and rising expenditures of US$20.05 billion, it will increase the cost of steel enterprises by nearly 130 billion yuan. From January to July, China's large and medium-sized steel enterprises had a sales profit rate of only 3.08%, a year-on-year decrease of 0.1 percentage points, and far below the national level of 6.11% of industrial enterprises above designated size.