The price of imported iron ore, which was difficult to reach last year, has made Chinese steel companies miserable, but this year, the price of minerals that have been falling due to falling demand has caused headaches for international mining giants. In the future, the future relationship between supply and demand of iron ore will be particularly concerned. My steel network analysis pointed out that there is no suspense in the apparent oversupply of iron ore in the next five years, which has become the most stable forecast for the prospect of imported iron ore market. Recently, due to sluggish demand, Brazil's Vale sold its 10 large ore vessels for US$600 million in order to seek to increase cash flow during the continuous decline in the price of minerals. The fourth largest miner, FMG, also admitted that it would save $1.6 billion through layoffs and delays in the development of a large iron ore mine in the Pilbara region of Western Australia. However, it is worth noting that although the international mines are no longer this year, they have also thrown predictions that optimistic about China's demand, the price of minerals will pick up. In response to the optimistic attitude of the mining giant, my steel network analyst poured a cold water on it. "China is the world's largest consumer and importer of iron ore. The changes in China's demand can effectively reflect the supply and demand situation in the global market. It is estimated that by 2015, after deducting domestic iron ore consumption, China's import demand will be about 800 million. Tons, about 120 million tons more than in 2011. This is likely to be lower than the international mine forecast, and there is no way to continue to be a strong support for high mining prices," said the analyst. According to analysis, with the rapid increase in iron ore prices in recent years, the world's three major mines Vale, Australia Rio Tinto and BHP Billiton took the opportunity to significantly expand capacity, in order to continue to profit from high mining prices. At the same time, emerging mines are also rising, trying to take a slice of the booming iron ore market. If the above mine expansion plans are completed as planned, the new ore capacity will reach 1.06 billion tons by 2015. By then, the global seaborne iron ore supply is expected to increase by 760 million tons, while the iron ore demand increase is only 220 million. Tons, oversupply reached 540 million tons. Even if 80% of the three major mine expansion plans are completed, the new mine expansion plan will only complete 30% calculation, and by 2015 the oversupply will be about 230 million tons. Overall, my steel network emphasizes that even if some iron ore projects are put on hold or postponed, the global iron ore market will still enter an oversupply phase. It is precisely because the market has changed from a shortage of supply to a supply exceeding demand. The price of once breaking through 200 US dollars per ton is hard to reappear. The iron ore price will seek a reasonable bottom in the next few years, and it is expected to remain at around 100 US dollars/ton.
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