Iron ore prices soared, the National Development and Reform Commission lowered expectations for price increases
Wanlong Securities Net Operations Department 2023/1/16 8:08:51
On the 15th, the official account of the National Development and Reform Commission issued a document, saying that some iron ore information companies recently reproduced false old news, confusing the public and causing adverse effects on the market.
According to the reporter’s understanding, the National Development and Reform Commission is not only making efforts in consulting and dissemination to reduce price increase expectations, but also plans to convene meetings of iron ore traders and futures companies to reduce price increase expectations.
The reason behind this is that the price of iron ore has risen too fast. Since November last year, iron ore futures and spot prices have risen from US$80 per ton to more than US$120, an increase of 50%.
The Price Department of the National Development and Reform Commission recently interviewed relevant information companies, reminding them to carefully verify and ensure accuracy before releasing market and price information.
The National Development and Reform Commission stated that it will continue to pay close attention to changes in the iron ore market and prices, and will work with relevant departments to further study and take measures to severely crack down on illegal activities such as fabricating and disseminating price increase information, hoarding, and driving up prices, so as to effectively ensure the smooth operation of the iron ore market.
In addition, the National Development and Reform Commission also plans to convene a meeting of large iron ore traders and futures companies on January 17. The theme is to remind and warn, and to request details of recent iron ore transactions.
Xu Yingchun, the consulting director of my steel network, believes that the supply of iron ore has increased this year. The new supply of foreign ore is 40 million tons, and 20 million tons will enter China. China’s iron ore will also increase by several million tons, and scrap steel will also increase. increase by several million tons. From the perspective of domestic demand, this year’s steel output will not exceed last year, and the pig iron output has declined.
Xu Yingchun believes that from the perspective of supply and demand, the price of iron ore does not have the conditions to rise sharply. “This year, the price of iron ore will fluctuate between US$90/ton and US$120/ton.”
It is now the end of the year and the beginning of the year, which is the off-season for demand. However, the price of iron ore has recently risen from US$80/ton in early November last year to US$120/ton, which is out of the fundamentals.
The recent surge in iron ore prices is mainly due to improved expectations, especially optimistic expectations for the real estate sector. Xu Yingchun believes that with the intensive introduction of real estate support policies this year, the real estate industry will definitely have a soft landing this year, but a soft landing does not necessarily mean a strong recovery. In addition, it will take time for the policy to be introduced and implemented until real estate prices stabilize, sales pick up, and then be transmitted to new construction. It is impossible for steel demand to pick up immediately after the Spring Festival due to favorable real estate policies, which also means that the reason for the sharp rise in iron ore prices is not valid.
Interestingly, since November last year, steel futures have risen by 20%, and spot prices have risen by 10%. Optimistic expected response, there are obvious factors of capital speculation.
At the beginning of last year, with the gradual exit of the autumn and winter production restriction measures, steel enterprises began to resume production, which increased the purchase of upstream iron ore raw materials, and iron ore ushered in a wave of rapid rise.
At that time, in February, the Price Department of the National Development and Reform Commission and the State Administration for Market Regulation held a “Special Conference on Reminders and Warnings” in Qingdao. The participants were mainly iron ore traders.