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Iron ore price and ocean freight constantly rising --- How is auto parts manufacturer going on?

Iron ore price and ocean freight constantly rising --- How is auto parts manufacturer going on?

2021-11-09

Recently, the price of iron ore in China has been rising all the way, ocean freight also has been rising, and the continuous increase in both has made steel companies complain and overwhelmed. Relevant departments and international mining giants believe that global iron ore supply and demand will remain tight in the new year, and prices will continue to rise.

A comprehensive analysis of the characteristics of steel imports in the first half of the year reveals that iron ore prices have risen mainly due to the following reasons.

First, affected by the rising international iron ore prices and the historical high of freight rates in the international shipping market, the country's strict control of the steel industry and repeated adjustments to the export rate of foreign trade steel have directly led to a significant decline in the growth rate of steel imports.

Second, the north-south differentiation has intensified, and the iron ore import center has gradually moved north. Affected by the rapid development of the northern iron and steel industry and the expansion and transformation of ports, the import of iron ore in northern ports has increased by more than 45%. However, some ports in the south are affected by the adjustment of regional industrial structure and limited radiation in the hinterland, and they have begun to show stagflation or negative growth. At the same time, the recent continuous production cuts of the three major foreign mining companies have caused tight supply and demand, and an increase in iron ore spot market prices has become inevitable.

Due to tight supply and demand, the price of iron ore continue to rise in the first half of the year. Compared with prices, the increase in ocean freight has made steel companies even more troublesome. Due to rising oil prices, fewer ships by sea, coupled with the influence of the higher spot purchase costs, sea freight rates continue to rise, which puts a lot of pressure on iron ore imports.

In the past two months, the ocean freight for iron ore transportation has soared and plummeted, and domestic steel companies complained about the freight rate. Due to the contradiction between the supply and demand of iron ore and the rising sea freight prices, domestic steel mills are seeking new ways out, and speeding up the pace of mining has become the first choice of steel mills. Of course, the current price of iron ore is rising, and ocean freight is constantly rising. The steel that survives the double-sided clip is still the most troublesome.

Steel pipe is a necessary material for rubber bush and rubber mount products, it is the main material for many auto parts industry, so our products are closely related to the price of steel. Actually since last November of 2020, the steel pipe price started to rise, now the price is still on a high spot. We will always keep the good quality products for our clients even under this difficult situation.


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