Medium and long-term trend down

Because of concerns that prices will occur in the third quarter adjustment, market sentiment hit hard. Some people even think that spot iron ore prices will remain low after the adjustment; Or 45 degree short radius pipe fitting elbows think that "China story" has come to an end, and so on. Ubs is expected after the adjustment of the third quarter, spot prices will rebound.

However, with the expansion of the main mining company project financed, seaborne trade and the global market since 2014, will be the excess supply of mass is expected to exceed 100 million tons/year. ASME B16.9 Butt Welded reducing tee Supply expansion as well as the diversified development of the major mining companies' pricing power is diluted. And, this structural change is the slowdown in demand for iron ore and China at the same time.

Upcoming excess supply pressure to long-term price forecast. Although the spot iron ore prices will face a seasonal changes, but the price of medium to longer term is facing a falling trend. China's high cost 3D eblow Carbon Steel pipe fittings producer and soon to enter the market of pure iron ore company will face more and more pressure, reduce the cost and shut down production capacity, they will eventually be a lower cost from Australia, Brazil and Africa's new supply. FOB powder ore (actual) for long-term price will be $72 / ton.

To sum up, although China's steel output remains strong, and iron ore in the supply chain inventory relative to run out, and the low level of inventory to provide support for price will continue for about a month of time, but the price adjustment will face the risk in the third quarter. October 9 - usually demand for iron ore in the off-season, and in 2013 also faces the new supply of Rio and Fortescue's listing. Long-term investors may not be affected by the short-term adverse factors, but the tactical investors may adjust the spot prices in the third quarter as a buy signal, because usually in the fourth quarter will usher in the commodity inventory before winter recovery.