[Mining machinery industry network] Recently, the sharp rebound in iron ore, the reason is due to the import of ore to the domestic ore prices expected convergence. In the downstream steel end demand has not improved, and the domestic ore relative to the sharp fall in the premium imported ore background, this rally will not reverse the market evolved, maintaining iron ore market outlook bearish view.

Does not have the reverse condition

Iron ore as a raw material upstream of the downstream end of the steel industry demand will determine the demand for iron ore iron and steel enterprises. This year's regulatory policies "directed" distinctive characteristics, despite frequent micro-stimulus, but due to the drag on the real estate industry slowdown, there is no significant improvement in demand for steel terminal. Terminal sluggish demand fully reflected in the iron and steel business inventories continued to rise, the China Iron and Steel Association latest statistics show that in mid-June at the end of key steel enterprises inventory stock of 15.113 million tons ten days, an increase over the previous ten days at the end of 583,100 tons, up 4.01%.

Construction steel demand slowdown, demand for industrial steel obvious improvement. From the point of view of investment in fixed assets, real estate investment from January to May increased by 14.7% year on year, growth slowed significantly, from January to May up by 23% investment in infrastructure, the growth rate has accelerated noticeably. However, due to the real estate industry's demand for steel construction steel demand accounts for more than two-thirds of investment in infrastructure to accelerate the real estate slowdown is difficult to eliminate bring down steel demand.

From the perspective of real estate transactions in the area, the Bureau of Statistics 30 cities, although a slight improvement in the area of ​​real estate transactions, but is still in the doldrums. As the real estate turnover will affect the future of the social expectations of the real estate market, it is expected to slowdown in new housing construction area, which led to the growth slowdown in the real estate industry, the amount of steel.

Industry needs, in May, above-scale industrial added value increased by 8.8% real growth, including manufacturing value added an actual increase of 9.9%, compared to 0.1 percent in April to speed up the manufacturing expansion is not obvious, reflecting the demand for steel industry no significant improvement.

Domestic ore premium down, pressing on prices

Ore imports and domestic ore average price of China Iron and Steel Association released (converted to 62% dry iron powder price) data show that in mid-April to early June, the relative domestic ore mine imported premium has remained at a high level, 6 Early was up 105 yuan / ton.

According to my estimate, the first five months of this year are cumulative import substitution of domestic ore mine ore production is equivalent to half of April. With the import substitution process ore for domestic ore depth, relative to the gradual premium domestic ore ore imports fall, since early June, domestic ore premium had fallen sharply to the current 35 yuan / ton level, the premium level of domestic ore has been significantly fall, taking into account domestic ore transportation cost advantage, domestic and imported ore mine almost "cheap" or even "discount."

Low premium level of domestic ore imports will make the price advantage is no longer mine. Under the current price level of imports to domestic ore mine has been basically completed the "price convergence", the latter alternative process ore imports will slow down domestic ore, which would weaken demand for imported ore base, pressing imported ore prices rebounded, considering to import ore price is the main spot futures price formation of the reference price, which will also be pressed directly reflected in the futures price.