Vale iron ore futures another accident "flash crash" far - term contract sealed down by the limit
Monday (March 18) morning opening, iron ore (619,5.00,0.81%) shi yuanyue contract lightning hit the 1909 limit, the main 1905 contract also quickly back to step on 600 yuan/ton line.As of yesterday afternoon's close, the main iron ore 1905 contract fell 5.10%, the largest one-day drop since November 26, 2018, far 1909 contract sealed in the limit."The main impact of the disk came from the resumption of about 30m tonnes of previously closed vale capacity."Shi lei, head of the investment and consulting department of new era futures, said the iron ore price had been strongly pulled up and maintained a high oscillation under the stimulus of favorable macro situation, the expected improvement of demand and Brazil's sharp supply contraction.At this stage the overall iron ore positive still exists, but Brazil's vale series of events on iron ore prices to re-estimate.On March 19, Brazil time, vale officially announced that the previously closed Brucutu mining activities and laranjeiras tailings dam operation has been approved to resume, involving 30 million tons of iron ore capacity.However, at present, the mine and tailings dam are still closed, and the final restart time still needs to be answered by the ministry of environmental protection.In fact, the overall iron ore output of the four major mines increased in 2018. In the first three quarters, a total of 825.403 million tons of iron ore were produced, a sharp increase of 15.65% from the same period in 2017, with an increase of 32.223,000 tons.In terms of mines, vale produced 283.653 million tons of iron ore in the first three quarters, an increase of 3.85 percent year-on-year, or 10.504 million tons.Rio tinto, second only to vale in terms of output, produced 21.5782 million tons, 8.954 million tons more than in the first three quarters of 2017, up 4.33 percent year-on-year.BHP billiton produced 18.2668 million tons of iron ore in the first three quarters, up 13.365 million tons or 7.89% over the same period in 2017.Fortescue's production for the first three quarters fell slightly by 0.42 per cent to 143.3 million tonnes from 600,000 tonnes a year earlier.In 2019, vale will have new projects reaching full capacity, with an annual capacity increase of 30 million tons. Rio tinto and BHP billiton will also improve capacity utilization, and fortescue is expected to maintain its current capacity.Previously, the four major mines were expected to increase production by 30 million to 40 million tons in 2019, but vale's production capacity affected by the accident so far has reached 82.8 million tons, of which about 40 million tons are deterministic production reduction and 42.8 million tons are temporary production suspension.The 30 million ton iron ore capacity of the Brucutu mine has been approved to resume, and the total supply of the four mines in 2019 will be the same as that in 2018."In 2019, China's crude steel production is expected to reach 940 million tons, while the total supply of iron ore is flat while the total demand increases slightly, which will support the shift of iron ore price center of gravity."Shi lei said.Futures daily reporter found in the interview, some industry people are not pessimistic about iron ore afternoon, because the seasonal law of steel mill starts to boost iron ore demand for the expected upturn.In the heating season of 2018/2019, "2+26" cities in China adopted differentiated peak shifting production plan, and the environmental control target was "heavy pollution days decreased by 3% year on year, PM2.5 concentration decreased by 3% year on year", which was somewhat relaxed compared with the year of 2017/2018 on the whole.From the perspective of the impact on the steel plant construction, the operating rate of blast furnaces in hebei decreased from 80% to 50% in the 2017/2018 heating season, while the operating rate of blast furnaces in hebei only decreased from about 70% to 55% in the 2018/2019 heating season.Crude steel output has fallen since peaking in October 2018, falling to 73.25 million tonnes in January.In the steel started a heating season after the downturn, the market is widely expected to start in late march steel mills are about to usher in the resumption of peak season.But since march, tangshan, wuan, linfen and other places with poor air quality, heavy pollution around the weather emergency response, steel mills and coking and other polluting industries stage strict production restrictions.As of March 20, steel mills did not have a significant recovery in the rate of operation, steel mills on iron ore procurement is relatively flat.According to shi lei introduction, the inventory of iron ore of average steel mill maintains in 20-35 days.Since the beginning of December last year, steel mills to iron ore a small amount of replenishment, the Spring Festival eve of the rapid rise in iron ore prices, steel mills continue to increase replenishment, but since march, steel mills have weakened.On the one hand, steel mills are operating normally, on the other hand, iron ore stocks have recovered to 31 days' worth of usable days, while iron ore port stocks rose to 14.7 million tonnes in the week ended March 15."The domestic demand this month because of the two sessions in tangshan and the surrounding areas of strict production restrictions, temporarily suppressed."With the end of the two sessions, the production limit will be gradually lifted, and the demand will gradually improve.Guotai junan iron ore researcher ma liang said.The impact of vale's events on iron ore capacity will reduce overall production at the big four mines in 2019, according to the respondents, while iron ore demand for the whole year will increase due to the expected increase in Chinese steel production. Iron ore supply and demand will be tighter than in 2018, and the price focus is expected to be higher.However, the approval of the resumption of 30 million tons of closed capacity has weakened the reduction of production at the four major mines, which will restore the iron ore prices that have been sharply raised in the early stage and restrict the upside of iron ore.On the other hand, the road for steel mills to resume production is a little bumpy, the spring start season will be late but will not be absent, iron ore demand is still expected to improve, as for the expected impact on iron ore prices, or has been in the early rapid pull up the process of "overdraft" part.Iron ore prices to adjust the short - term, far more than the monthly decline in recent months, but demand expectations still exist, should not be too bearish."It will be interesting to see if the restrictions in places such as tangshan end as scheduled and if the 12.8m tonnes of temporary capacity shut down in Brazil are reopened."Shi lei said.
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