Spring has just arrived for domestic mines

China's iron ore grade is low, the cost of mining and selection is high, while the price of iron ore continues to slump, the competition with imported iron ore is weak, the profit is meager or even loss, and gradually exit and decline.In 2014, the production of domestic iron ore ore declined year by year after reaching 1.514 billion tons, and declined to 695 million tons in 2018, and nearly 819 million tons of raw ore production disappeared in four years.

At the same time, China's crude steel production rose steadily, but also caused China's iron ore dependence on the increase year by year.

What happened to the 819m tonnes of crude ore production that disappeared in four years?

On the one hand is the iron ore price cliff type slide, even lower than many small and medium-sized enterprises "cost line" caused by the passive exit.In January 2015, only 53 percent of China's iron ore enterprises were operating, including 63 percent of large mines, 40 percent of medium-sized ones and 19 percent of small ones.This means 70 percent of small and medium sized iron mines in Korea have closed and 37 percent of large ones.

On the other hand, it is also an important step for China to actively seek a "breakthrough" in the iron ore industry pattern.Lagging behind will be beaten, rather than being long-term suppression by foreign giants to "suffocate", it is better to survive, to concentrate on big things.Since 2015, policies such as environmental protection and capacity reduction have been tightened, backward small and medium-sized mines have been eliminated, and a number of domestic iron ore enterprises with strong competitiveness have been supported to develop in a large-scale and intensive manner. Mergers and acquisitions have been eliminated, and competition with "oligarchs" has been eliminated.

The disappearance of 819 million tons of iron ore has become a stepping stone for China to get rid of the "containment"!

In 2019, with the rise of iron ore prices, small and medium-sized mine capacity out of the market, and mining enterprises to reduce the tax burden, domestic iron ore production has recovered, domestic iron ore again sounded the horn of "increase".

In the second half of 2021, the crazy two years of iron ore prices again ushered in the "slump", at this time, it is time to test the results of the "transformation and upgrading" of domestic mines.

On September 10, the price of domestic 62% iron concentrate was 1146.59 yuan/ton, up 0.1 yuan per ton, the average price of the month was 1150.65 yuan/ton;Domestic 65% iron concentrate price was 1278.53 yuan/ton, up 0.08 yuan per ton, the average price of the month was 1283.2 yuan/ton.

On September 10, the import 62% fine ore CIF price is 128.59 USD/ton, month-on-month decrease of -1.87% per ton, the average price of the month is 136.95 USD/ton;The spot trade price of imported 62% powder ore was 1065.64 yuan/ton, down by -0.96% per ton, and the average price of the month was 1097.64 yuan/ton.

At present, the import of ore falling, domestic ore has a tendency to stabilize, it shows that in the national "support domestic iron ore resources guarantee ability to improve" under the background, domestic ore has won enough "confidence" in the market.

In the first half of this year, China's iron ore production increased by 76.858 million tons year-on-year, equivalent to 62% iron concentrate year-on-year increment of about 21.9594 million tons.After ignoring the inventory factor, the contribution of domestic iron ore to iron element increment was 13.614,800 tons, accounting for 57.46% of the year-on-year increase of pig iron in the first half of 2021. Domestic iron ore has become the largest source of iron element increment in China in the first half of 2021.

In terms of imported ore, the port inventory of imported iron ore at the end of June this year is basically the same as that at the beginning of the year. Therefore, the iron ore consumption in the first half of 2021 is approximately equal to the import of iron ore, which is 560.71 million tons, with a year-on-year decrease of 3.52 million tons.The contribution of imported iron ore to the increase of pig iron production in the first half of 2021 was -2.182,400 tons, accounting for -9.21%.

This further shows that in the first half of this year, imported ore "down the altar", Chinese steel demand for imported iron ore is gradually reduced.

According to the National Bureau of Statistics, from January to July 2021, the country produced 570.18 million tons of iron ore, up 14.5% year on year, and the domestic iron ore output is expected to maintain growth in the second half of the year.

During the two sessions this year, a number of iron and steel industry CPPCC members put forward suggestions to increase the development of domestic iron ore resources, reduce taxes and fees for the development of domestic iron mines, speed up scientific research, enhance the competitiveness of domestic mines.Recently, the Ministry of Natural Resources responded to the proposal of CPPCC members, explicitly supporting the development of domestic iron ore resources.

In general, the continuous growth of domestic iron ore output will enhance the supply guarantee ability of Iron resources in China, and the spring of domestic ore has just arrived.