The iron ore negotiations which last up to half a year are full of twists and turns. A harsh reality is that, despite the decline in steel demand, production overcapacity in China and many other factors which seem to be good for the buyer in iron ore negotiations, China's iron and steel industry is still at a disadvantageous position in the negotiations of ore prices.
China Iron & Steel Association was expecting price decline but the international iron ore giants didn’t take that action. As the culprit behind the full loss of China's iron and steel industry last year, iron ore has become "the greatest pain" of China's iron and steel industry.
When the economy has not yet begun to stabilize and pick up in the beginning of the year, imports of iron ore began to surge and the price rose in an irrational manner.
Talking about the excess of imports of iron ore, industry experts worry that this not only distorts the relationship between the domestic iron ore supply and demand, but also leads to the rise in ocean freight, resulting in the accumulation of a large stockpile of iron ore in the port, all of these harm the healthy development of iron and steel industry.
The chaos in iron ore market is closely related to the low industry concentration of China's iron and steel industry.
According to incomplete statistics, China's has more than 70 large and medium-sized steel enterprises, but
the top five steel production enterprises accounted for only 28.5 percent of total output. But in the United States, the European Union, Japan and other developed countries and regions, the top four companies share
about 60% to 70% of total steel output. Behind low industrial concentration are the complex contradictions
between enterprises, particularly the conflict between large steel enterprises and small and medium-sized steel enterprises.