Steel demand significantly reduced, the steel industry can survive the dark period?

The Chinese steel industry will face an
unprecedented reshuffle, steel prices dropped back to 18 years ago, how the
steel industry can spend the dark period?

Qingdao Port, one of the major ports as
domestic iron ore imports is facing a shortage of land situation. As of August
24, China stocks totaled has 98.95 million tons of iron ore in the 30 major
ports, the total stock hit a new high in the past 23 weeks. Compared with the
same period last year, total inventories increased 3.74 million tons.

High inventories reduced demand for iron
ore making prices to hit a three-year low. The latest imported ore index is 94
points, compared with the same period last year a decrease of 47.5%, which means
the variety of major iron ore prices close to the cut.

After crazy investment in the last three
years, the domestic steel mills serious excess capacity. Since the second half
of last year, China’s economic weakness further reduced demand for steel. Domestic
steel mills and foreign iron ore giant had to pay the bill for the crazy three
years ago.

Decline in performance of the three iron
ore giants

2009 years ago, a Iranian businessmen managing
import and export trade in Yiwu cooperate friends to start iron ore trade. Until this year has been so
smooth. Last year, the company sold 300 million
tons of iron ore in China, this year could not reach 1 million tons.” The
sales manager of the company, Mr. Ban said. And company has 100,000 tons and 30 million tons of inventories in Iran and domestic port respectively, a lot of inventory has to stay at the
dock for four or five months. However last year these ore from Iran to China within 20 days will be able to find a buyer.

In April this year, the Iranian businessman
and friend prepare to open up a new mine in the local Iranian, but because few orders were received from
China, which was unlimited duration.

the end of last month, BHP Billiton announced to postpone a scale of up to $ 80
billion of spending plan. The plan centered on China, in the next five years to expand its iron ore, coal,energy and base
metals sectors. This resolution is in the context of the
company’s annual profit fell 35%, this is also the first time that the company of
profit declines within three years.

A few days ago, an analyst at Citigroup point out that Rio Tinto’s earnings per share fell about one-fifth, the operating
cash flow decreased by 60%, close to the lowest level since the 2009 financial
crisis. The experts believe that the Chinese steel production does not appear to have fallen sharply, but the high company of iron ore and steel stocks as
well as the future economic development of expectation is sufficient to allow the Big Three to remain
cautious for the future, “There is no
doubt that the global miner began to worry about the end of the” super
cycle “of China’s economy for iron ore.

ERW Steel
, Tinplate,Steel
, Steel
manufacturer, supplier and exporter

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