【Click】 Recently, the Brazilian VALE company has signed a formal written manner the long-term supply of iron and steel production enterprises in China's iron ore unilateral breach of contract, a sudden substantial increase in the price.  To this end, public opinion very closely. June 16, China Iron and Steel Industry Association, the Secretary-General Shan Shanghua Steel Association hosted a special meeting to specifically study this state of affairs  September 16, China Iron and Steel Industry Association, the organization of domestic steel production enterprises, the domestic ore production department held a special meeting to specifically look into the replacement of domestic ore mine in Brazil program, plan to set up the replacement of domestic ore mine in Brazil supply channels, and how to solve the internal part of the Enterprise sintering and teams with Tie Jingfen the long-term source of problems in place.

    China Iron and Steel Industry Association, the organization studies of domestic ore mines replace Brazil's program is targeted mainly at Vale do Rio Doce (VALE) unilaterally tore up the annual price of iron ore reached an agreement to ask the Chinese insisted on the purchase price of iron ore, iron and steel enterprises to improve their behavior.If it agrees to this request, the Brazilian long-term agreements mine's annual cumulative rise as much as 98%. The sudden price increases on the VALE request, the Chinese steel companies unacceptable. To this end, VALE has been stop Chinese ship loaded mine, resulting in a large number of Chinese cargo ship stranded in Brazilian ports, to the Chinese iron and steel enterprises has caused tremendous economic losses.

    Secretary-General of China Iron and Steel Industry Association, Shang-Hua Shan, said at this meeting, this one-sided, abrupt termination of long-term contracts in the event unprecedented in the history of China's imports of iron ore trade.  Iron and steel producers urged to resist price increases in Brazil VALE unilateral acts, the Chinese Iron and Steel Industry Association, fully supports the just action of manufacturing enterprises. China Iron and Steel Industry Association in September 12 to China Iron and Steel Industry Association, on behalf of a formal letter to VALE company, from the tradition of friendship and trade and respect for long-term international trade contracts in principle, require VALE company to stop this irrational behavior.

    News from the meeting that the iron ore prices have been rising continuously in recent years, causing a lot of pressure to the steel mills, especially this year due to raw materials, fuel prices soaring, "Steel affordability has reached the limit." Despite China's iron and steel enterprises is relatively low labor costs, but profits are still substantially reduced; 7,8 months of this year, China's major steel companies are already low-profit business, small and medium iron and steel enterprises is at a loss have been marginalized or even a loss.  At present, iron, steel, wood ring than the negative growth, individual small businesses have been discontinued.

    According to analysis of long-term agreement of iron ore prices increased year after year, driving up the spot ore prices, a substantial increase, stimulating excess of China's iron ore importers to import iron ore, iron ore, steel stocks surge caused by a large number of iron ore pressure port, and caused a false impression that China's iron ore demand. At present, the iron ore spot prices have been gradually falling, Brazil VALE miscalculated the situation, moving against the tide, at this point asked prices. If such trends continue to develop, is likely to occur before the end of a long association ore spot price is higher than mine situation, which is China's steel industry can not bear.

    Shan Shang-Hua In discussing how to resist VALE, while prices of domestic steel companies to ensure normal production and operation, said: domestic-related technical aspects of iron and steel enterprises will be adjusted from the dependence of iron ore in Brazil.In the establishment of a new, stable domestic iron ore supply channels at the same time, China's steel industry will resolutely carry out overall control, reduction of iron ore consumption.At the same time, we must take steps to block the low value-added, high pollution and high energy consumption of steel billet and steel exports, improve the steel quality standards, reduce the unit consumption of steel in order to control the total iron and steel to achieve China's iron and steel industry of science and healthy development goals .

    Recently, the China Iron and Steel Industry Association executive vice president Luo ice also revealed that the technical aspects of domestic iron and steel enterprises will be adjusted from the dependence of iron ore in Brazil. In the establishment of a new, stable domestic iron ore supply channels at the same time, China's steel industry will resolutely carry out overall control, reduction of iron ore consumption. In addition, the China Steel Association to encourage domestic mines produce more, which will inevitably bring about a small mine with or without Brazil.

    Luo Bingsheng said the view from the current development trend of China's Hong Kong kept mine a significant increase in inventories last week, the port reached 71 million tons.  Brazilian ore prices have a long association with the Indian spot ore prices were flat ore, CVRD also further price increases, this is a very unwise to do so will inevitably cause us to abandon the use of Brazilian ore.Brazilian enterprises should pay attention to and to ensure strict implementation of the contract to maintain the normal trade order.