Iron ore is the main raw material of iron, accounted for the rapid development of iron and steel industry 60%. Asia pig iron cost, has changed the pricing rules Chinese imported iron ore, the annual pricing model is currently being more index pricing model short replaced, the steel industry has been aware of the importance of risk management to the frequent fluctuation of price the. Zhi Shangs black metal product chain is respectively TSI and Platts two index futures based on the settlement, there are these two index options, and rebar futures, and America coil, coil, the Black Sea billet, Europe, Turkey, Australia USA scrap scrap coke coal black metal covering the whole industrial chain products.
In 2008 June, Platts global market launched the worlds first for seaborne iron ore daily price assessment services. At the end of each working day (for, most Asian spot market is China time eighteen thirty), Platts analyst for the time prior to the collection of information is evaluated, thus forming the price index of the day. The core idea is to find the Platts index can clinch a deal price. Platts index every day looking for the highest and lowest price the buyer seller quotation to evaluate index price of the day. Platts index derived from Chinese market spot price of iron ore, initially in the transaction price of 62% grade as the basis. Platts introduced iron ore price index as the basis for pricing the three miners quarter and spot trade settlement, has become the determining iron ore prices * * * index, especially in 2010 April after almost all Australian mine, Brazil mine all refer to the index.
Over the past ten years, the global iron ore consumption increased by 88%, with an average annual growth rate of 5.9%, which Chinese iron ore consumption grew by about 4.2 times, with an average annual growth rate of 13.8%, Chinese demand as the main driving force. In 2012 China consumption of iron ore, 37.3% by the domestic supply, 62.7% rely on imports. The world iron ore trade formed a transportation from Australia, Brazil, India and other countries to China, Japan, EU and other countries and regions of the pattern. From a historical point of view, the amount of iron ore demand in China increases gradually. From the regional perspective, the demand for iron ore is concentrated in the central area of Bohai. From the import customs, more than 50% of the iron ore import customs declaration by Bohai area. China finished steel production accounted for nearly half of all world, which makes the rolling mill faces not only supply constraints, but also meet the transport uncertainty, price fluctuation which will lead to instability of the.
The main factors influencing the Chinese iron ore prices: macroeconomic performance is the barometer of demand for iron ore market, has important influence on the price change; the construction industry, automobile industry and other related industries demand for steel is strong, will drive the demand for iron ore, the price in the high cost of iron ore; by a series of factors, mining equipment prices, labor costs, production water, electricity price, the relevant taxes and shipping costs will affect the iron ore CIF Cost; country of origin of the import and export policies, import tariff policy and consumption country of iron and steel industry development policy, all have effect on iron ore the price of iron ore; productivity growth and reduce also have influence on the market price; international ore prices and domestic prices strong linkage, the international market price transmission to domestic, thus the impact of the iron ore market prices; the downstream demand change, the iron ore market prices will also fluctuate with the; when the iron ore market prices higher and alternative products such as scrap prices are relatively low, will affect the prices of stock changes; Will affect market prices for iron ore, such as area inventory increased, traders are willing to shipments, prices will go down, area inventory is low, traders hoard goods, will push prices higher.
Over the past 40 years, iron ore prices have been through an annual negotiation process set between miners and steel plant, which formed the "benchmark price" - one for the set price. As the important pricing point China appearance has broken this process, which was established by using the spot with reference to short-term contracts of the open market price discovery mechanism based on. The spot transaction after calculation and combination of price index, and thus become the iron ore trading settlement reference point. Floating price index pricing mode, let China steel industry enterprises are aware of the importance of financial derivatives with iron ore price risk management, the use of the iron ore demand Zhis financial derivatives to hedge the risk of more and more intense.