In the first half of 2011, the national port iron ore stocks exceeded 95 million tons, setting a historical record. In August, the situation of imported iron ore pressure port still failed to improve, and it continued to hover around 80 million tons.
In the first half of 2011, domestic raw ore production exceeded 570 million tons, a year-on-year increase of 22%.
At the same time that imported iron ore is seriously polluted, domestic iron ore production has grown rapidly. In addition to the rising import price, it also implies that China's iron ore supply pattern is undergoing some changes.
"Multiplication plan"
On September 8, the Sijiaying open-pit iron mine in Tangshan City, Hebei Province. The second largest open-pit iron mine in the country, which is affiliated to Hebei Iron and Steel Corporation (000709, shares), is busy. Each shovel's 17-cubic giant electric shovel is working back and forth; a giant loader with a capacity of 220 tons and a three-story building is screaming like a behemoth.
Wang Hongren, chairman of Hebei Iron and Steel Mining Co., told the "Financial Weekly" reporter that these large-scale equipment were purchased in the past one or two years, and the domestic iron ore mining is moving toward large-scale and large-scale development.
Wang Hongren released his words: During the “Twelfth Five-Year Plan†period, Hebei Iron and Steel Mining Company is expected to invest 50 billion yuan in construction funds, and will realize the annual production capacity of 35 million tons of iron concentrate powder at the end of the “Twelfth Five-Year Planâ€, making the group iron ore. The self-sufficiency rate of stone has increased from 9% to 40%, and the dependence on overseas giants such as “Two Extensions†has been reduced from 65% to 20%.
"We can't always stay in the original impression of China's iron ore production. We always use the technology and small mines in the 1990s to measure the mining capacity of China's iron ore mines," Wang Hongren said. From the meager production capacity, you can only sit down and take control of the iron ore voice."
Not only Hebei Iron and Steel, the central government Anshan Iron and Steel Group also proposed to achieve a "multiplication plan" for iron ore production in the next three to five years.
Liu Haimin, director of the China Metallurgical Industry Economic Development Research Center, told the "Financial Weekly" reporter that due to the continuous increase in the price of imported iron ore, it exceeded 30% in 2010 and increased by 66.08% in the first half of 2011, reaching $154.9/ton. It has stimulated the growth of domestic iron ore mining investment.
In 2010, the investment in fixed assets of China's iron ore mining industry has exceeded 100 billion yuan, which is twice the cumulative investment during the 10th Five-Year Plan period; the output of iron ore raw ore has also increased from the annual output of 400 million tons in the 10th Five-Year Plan. Up to now 1.2 billion tons.
Yang Jiasheng, secretary-general of the China Metallurgical and Mining Enterprise Association, said that by 2015, the country will build 8 iron ore mines of 10 million tons or more, 15 iron ore mines of 5 million tons or more, and 20 iron ore mines of 2 million tons or more. The output of the ore mine should reach 1.5 billion tons, ensuring that 40% of the iron ore supply is self-sufficient.
At the beginning of September, the Ministry of Industry and Information Technology, China Steel Association and other departments also held a special meeting to guarantee the supply of iron ore in domestic iron and steel enterprises, and put forward the requirements of “increase domestic iron ore mining investment and increase domestic iron ore self-sufficiency rateâ€.
Achilles' heel
However, with China's current iron ore reserves, can it support the ambition of steel companies?
Lu Yexuan, director of the Research Department of the China Mining Association, told the "Financial Weekly" reporter that China's proven and unexplored iron ore mines are relatively deep, basically 500 meters below the ground, Jining-Zhangzhou and Benxi Dabagou The depth of the deposits is between 1000 and 2000 meters below the ground. China has not yet been able to mine such iron ore.
In addition, a major feature of China's iron ore mines is small scale, large mines, and scattered distribution. Lu Yezhan believes that there is no fundamental change in China's iron ore resources and poor resource conditions. It is difficult to complete the self-sufficiency rate of 40% iron ore. “Even if you barely achieve a self-sufficiency rate of 40%, China Iron The cost of using ore is also difficult to reduce."
Wang Hongren told the "Financial Weekly" reporter that in the 1980s and 1990s until 2003, China's steel industry only focused on the development of the main steel industry, but ignored the investment and development of upstream mines; historical iron ore prices have been low Few steel companies are willing to invest in mines, leading to the marginalization of ore production by steel companies.
Take the mines of Hebei Iron and Steel Mining Co., Ltd. as an example: from 1998 to 2008, there was no attraction for a college student in 10 years; in 2008, the Sijiaying mining area still used 4 cubic meters of small electric shovel to open ore, the mine car loaded The weight is only 30 tons; in Chengde, the mine still uses traditional manual bookkeeping, no cost awareness, let alone modern production technology...
However, this situation has changed since September 2008. Hebei Iron and Steel Group began to integrate more than 10 Hebei iron mines belonging to Tangshan Iron and Steel Group and Handan Iron and Steel Group, and established Hebei Iron and Steel Mining Company. At present, mining investment has accounted for half of the total investment of Hebei Iron and Steel Group.
Taking the second phase of the Sijiaying mining area as an example, from 2009 to 2010, two 17-cubic giant electric shovel with a unit price of more than 50 million yuan were purchased; more than 20 loading vehicles with a capacity of 220 tons were purchased. The loader with a weight of 400 tons; in June 2009, the dedicated line of the Shijiaying iron ore stripping soil railway built by the Sijiaying Iron Mine was officially put into operation.
“The problem of iron ore production capacity is mainly due to insufficient investment,†Wang Hongren told the “Financial Weekly†reporter. “The 40% self-sufficiency rate is technically non-existent. Foreign advanced mining has provided us with Successful experience. At present, the coal mining enterprises have a depth of 1000 meters, why can't iron ore enterprises reach?"
At present, Hebei Iron and Steel Group is preparing to include nearly 5 billion tons of mineral resources of Hebei Iron and Steel Mining Co., Ltd. into the financing scope of the Group. The first phase plans to raise 8 billion to 10 billion yuan.
High-priced domestic products?
“It is one thing to mine the ore; but whether the extracted iron ore is competitive is another matter.†Lu Ye, director of the Research Department of the China Mining Association, told the “Financial Weekly†reporter.
Iron ore is a resource product whose price is determined by the cost price of the part of the product with the worst resource conditions and the highest production cost at the balance of supply and demand. The price of imported ore abroad has risen sharply. On the one hand, it is caused by the strong demand for iron ore in China; on the other hand, it is caused by the high cost of domestic ore production.
Zhang Wei, researcher of the Furnace Materials Department of Tangshan City, has told reporters that the local 65.6% iron fine powder acceptance price of Tangshan is about 1,600 yuan / ton, while the foreign metal 63.5% iron fine powder acceptance price is only 1,520 yuan / ton. If the price is calculated, it is more cost-effective to use imported iron fine powder. If the steel mill considers the grade of iron fine powder, it is more economical to use domestic iron fine powder.
“Because of the current shortage of domestic iron concentrate, some steel mills have difficulty in loading goods. If they are to be purchased from other provinces, the cost will be higher. Through comprehensive cost considerations, all steel mills are increasing the amount of imported iron concentrate.†Zhang Wei believes that "the production cost of domestic iron fines does not fall substantially, and steel companies are still difficult to accept."
Liu Haimin, director of China Metallurgical Industry Economic Development Research Center, said that at present, the iron ore fines of some medium-sized mining enterprises in China only cost more than US$100/ton; while Australia's iron-containing fines of about 60% are dug out by train. Only about 21 US dollars / ton to the port of loading, plus shipping and insurance costs, the cost of arriving at China's domestic ports is less than 40 US dollars.
In July of this year, FMG Group, Australia's third-largest mine, declared that if iron ore prices fell to $70 per ton, the company still had a profit.
"If we compete with imported iron ore at this price point, China's iron ore producers will almost lose money." Wang Hongren told reporters, "But the chances of such an incident are not great, China's iron ore enterprises are also Production costs are being actively reduced.†In fact, the potential for China's iron ore production costs to fall is huge. Tian Zhiyun, head of the Sijiaying mining area, said that the waste and work in the production of the mining area has been prominent in history.
In 2009, Hebei Iron and Steel Mining Co., Ltd. began to implement refined management. The cost of iron fines produced by it was 29.3% lower than that of 2008, and the potential for tapping was 766 million yuan.
Historically, only the wrenches and screwdrivers used for maintenance have been re-purchased in the mining area almost every year. Each miner has several sets of repair tools at home. After the implementation of 6S refined management, the entire mining area does not need to add new tools for 3 years, and this alone will save nearly 100,000 yuan;
The terrain of the Sijiaying mining area is complex, and the ore transportation line is long. In the history, the mine car driver often sleeps in the middle of the process, resulting in untimely ore transportation, ore and mining. After the implementation of the GPS mine positioning and dispatching system in the mining area, the ore transportation capacity has increased by 20%.
In the first half of this year, the cost of iron concentrate in Hebei Iron and Steel Mining Company decreased by 45% compared with the beginning of the company in 2008. It is estimated that at the end of the "Twelfth Five-Year Plan", an average production cost of 490.75 yuan / ton will be realized, equivalent to 76.8 US dollars / ton.
Excess shadow
Wang Guoqing, a researcher at Lange Steel Information Research Center, told reporters that the high price of iron ore in recent years has led to a wave of domestic and international investment in iron ore. As of the first half of this year, domestic raw ore production has accumulated more than 570 million tons, an increase of about 22% year-on-year; overseas countries such as India, South Africa, and Russia are also increasing investment.
In contrast, China's steel production is decelerating, and the growth rate of steel production has increased from an average of more than 20% per annum during the 10th Five-Year Plan period to 10% during the 11th Five-Year Plan period; The growth rate during the period can only reach 5% to 6%.
The surge in production capacity of iron ore will increase the supply of iron ore higher than demand and supply oversupply. “Even if there is an oversupply in the future, the price of imported iron ore will not be lower than US$100~120 USD/ton,†said Wang Huijia, chief analyst of China Merchants Futures. “With the current introduction and improvement of carbon and resource taxes in Australia, In the future, the cost of foreign iron ore will increase; coupled with the restrictions on the supply capacity of high-quality mines, mines with foreign iron content of about 50% will be successively mined, which will further increase the cost of imported iron ore."
China Mining Association Lu Yezhi believes that some mining companies are currently offering large-scale expansion and lack of market demand. China's steel production has reached its peak, and the demand for iron ore is unlikely to increase significantly. The serious pressure on imported iron ore reflects the iron and steel companies' cautious demand for iron ore.
“Short-term market fluctuations may affect the mining and investment of iron ore; but as a large state-owned mining company, it is necessary to consider the long-term market trends.†Wang Hongren, chairman of Hebei Iron and Steel Mining Co., told reporters, “We proposed It is the management policy for the country's mining. It undertakes the mission of ensuring the safety of China's iron ore supply and changing the situation of Chinese steel companies in the supply of iron ore. Therefore, any short-term fluctuations in the market will not change our development. direction."
“Even if there is an oversupply of iron ore, it is our contribution to the national steel industry. If foreign steel giants really dare to reduce iron ore prices to US$70-80/ton, this will certainly be for domestic mining groups. There is a huge blow. However, for Hebei Iron and Steel Group, which has integrated mining production with steel industry production, the profit of steel companies will make up for the losses of mining enterprises. This is an unmatched advantage for small and medium-sized mining enterprises, and it is also a foreign mine. Enterprises do not dare to cause trouble." Wang Hongren believes.
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