In the "China Steel Association" announced the suspension of collective iron ore negotiations, the provinces have announced to speed up the province's iron and steel enterprises integration.

China Steel Association, a person in charge recently held in the "China Iron and Steel Industry restructuring and development forum," said that following the beginning of the province of Shandong iron and steel enterprises after the integration of Shanxi Province, also announced the province's iron and steel enterprises into two major iron and steel enterprises. The provinces in the country, "two sessions" held on the occasion, have started a new round of iron and steel enterprise integration, in addition to external pressure from the outside, but also for high-level and external support.

"The financial sector only study the financial problems, the industry only study the industry's problems, hesitate, then the Chinese steel industry raw materials market, we will never have the right to speak." Industrial and Information Technology Chief Economist Zhou Zixue in the above forum , The current urgent need to do a combination of business and financial research, the Ministry of Industry is the subject of this research.

Under pressure

The province to speed up the integration of iron and steel enterprises in the province, on the one hand due to the domestic steel industry policy, energy saving policy pressure, on the other hand is the international iron ore price negotiations difficult, iron and steel enterprises if the integration capacity scale, Aspects will be at an absolute disadvantage.

Ministry of Industry in the February 16 issue of "2010 iron and steel industry operation and the 2011 outlook" in the forecast, the decline in domestic steel consumption intensity, steel export situation is not optimistic, bulk fuel was on the rise.

In recent years, China's steel has been wandering in the doldrums, this dilemma and the external environment is related to dramatic changes, but also with the steel industry itself, many problems related.

"Now the world is set off a fourth round of the iron and steel industry, the wave of large-scale mergers and acquisitions, is weakening our country as the world's largest steel-producing countries, the scale of steel enterprises." Wuhan University of Science and Technology Dean Pan Lingling said, International raw material prices rise, iron ore has become the bottleneck of the development of iron and steel industry.

National Development and Reform Commission in 2005 to develop the iron and steel industry development policy requirements, to 2010 to achieve the top ten steel enterprises in steel production accounted for more than 50% of the total proportion of the policy objectives, by 2020, will be greater than 70%.

But as of now, the top ten steel market share is only higher than 40%. Iron and steel industry, Hebei Province, iron and steel production for six consecutive years ranked first in the country, but the size of the industry can not hide the huge level of its industrial development behind.

Hebei Iron and Steel Group Chairman Wang Yifang said that on June 30, 2008, by the original Tangshan Iron and Steel Group and Handan Iron and Steel Group formed a strong combination of Hebei Iron and Steel Group. Hebei Iron and Steel Group, relying solely on the integration of advantages and synergies to achieve in a single subsidiary of the diversification of operations can not be achieved under the integration benefits of up to 7 billion yuan, the bank's overall credit size of more than 230 billion yuan, access to new iron ore resources 35 Billion tons.

On the basis of the internal integration of the Group, Hebei Iron and Steel further controlled the stone steel, reorganization of the Senate machinery, "progressive equity integration" restructuring 12 private steel enterprises.

However, in the wave of iron and steel integration, not all iron and steel enterprises have the same results of Hebei Iron and Steel, but in practice, many companies regardless of local reality, their own situation, the results not only failed to establish a modern industrial system, But the force was dragged down.

"The development of iron and steel industry is still very difficult today, whether it is the problem of resources, energy-saving emission reduction environmental problems, the size of the enterprise, the industry is not strong and strong, have not been a fundamental solution, so this industry In the enterprise is the main body, the whole industry there are so many problems, but also depends on a business, especially the leading enterprises to solve. "Zhou said.

Industrial finance

Zhou Zixi special emphasis on how the Chinese steel industry to improve the core competitiveness, especially in the current international raw material market price of the right to speak, as well as iron ore market financial aspects of these two areas, in urgent need of further study.

In fact, China's iron and steel enterprises in the international pricing mechanism of raw materials, long-term "aphasia", helpless. To iron ore, for example, China Steel Association in the iron ore negotiating table almost no negotiating advantage at all, and this is not related to the interests of Chinese iron and steel enterprises are not unrelated.

Since April 2010, China's iron ore pricing negotiations are also deprived of the qualifications. Adhere to more than 20 years of iron ore annual negotiation pricing model by the Vale, Rio Tinto and BHP Billiton three major mining companies to change to quarterly pricing, while using the index pricing.

At the beginning of this year, China was further involved in the iron ore futures pricing market. January 29, the Indian Commodity Futures Exchange (ICEX) announced the official launch of iron ore futures products, becoming the world's first iron ore futures to launch the exchange, India has taken the lead in the iron ore into a strong A strong first step in financial instruments.

From the annual negotiations, to the quarterly pricing, and then to futures pricing, iron ore finance gradually become a reality, the Chinese steel companies have always been negative response, passive acceptance.

"The financial sector only study the financial problems, the industry only study the industry's problems, stagnation, then the Chinese steel industry raw materials market, we will never have the right to speak." Zhou Zixue stressed.

Zhou Zixue said that foreign countries have taken a step in the combination of industry and financial industry, China's industry and the financial sector also need to find the intersection of the two, integration development, in order to promote the financial market in China, to further achieve the international raw materials market On the price of the right to speak. The Ministry of Industry is also investigating this.

Today, iron ore futures have been launched, the Chinese steel industry for opportunities and challenges coexist. On the one hand for the Chinese steel industry and the financial industry combined with the development of the road to create the conditions; the other hand, how will strengthen the international financial discourse to fight for more pricing power proposition, placed in front of China.

In the provinces set off the iron and steel enterprises to integrate heat, the Ministry of Industry to carry out the above research for the next round of iron and steel enterprises to explore the pricing power.

"We have already held a symposium before the year, and we will speed up our research and form fruit as soon as possible." Zhou Zixue said.