In 2007, the benchmark iron ore price rose 9.5%
(There will be different degrees of impact on the petroleum and chemical equipment manufacturing industry.)
On December 21st, Baosteel took the lead in grabbing the world premiere rights in the first round of international iron ore negotiations and reached an agreement with the world's largest iron ore producer Brazil CVRD on the 2007 international iron ore benchmark price. As a result, the price of fine ore produced in the north and south of CVRD will increase by 9.5% on the basis of 2006 respectively. The reporter learned from the relevant parties that this round of price increases will have different degrees of impact on different industries and companies in the production of petroleum and chemical equipment. It will also inspire relevant companies to take various measures to resolve the upward pressure on costs.
For downstream industries such as petroleum and chemical equipment manufacturing, the impact of price increases on iron ore and steel is manifold. According to Zhao Zhiming, secretary general of the China Petroleum and Petrochemical Equipment Industry Association, in the petrochemical equipment industry, such as vessels, towers, and heat exchangers, the cost of raw materials accounts for about 70% of the total cost, while steel costs account for 85% of the cost of raw materials. about. Each round of price increases will bring about an increase in costs. In 2003, the rise in the price of iron ore and steel made the chemical equipment manufacturing industry worse. The purchase price of steel products generally rose by 30% to 50%, and the total industry loss was 249 million yuan. Since 2004, with the drive of investment in the domestic petrochemical industry, the concentrated release of new steel production capacity and the intervention of the national macro-control, as well as the rapid growth of oil drilling equipment, rubber equipment and other exports, China's chemical equipment industry has finally reversed The industry's loss-making situation, product sales revenue, total profit, export delivery value and other major indicators have maintained an annual growth rate of 20% to 30%. The price increase of iron ore and potential steel price increases have little impact on the production of oil and gas drilling equipment, but may have a relatively large impact on downstream petrochemical and chemical equipment manufacturing. According to Jiang Lin, deputy chief engineer of Jinzhou Heavy Machinery Co., Ltd., after the price increase of steel products, not only the procurement costs will increase, but the procurement cycle will also be extended, especially for special steels such as thick plates, because there are few domestic production enterprises and the capacity is saturated. It is also in short supply in foreign countries, and the difficulty of procurement will increase.
Although the increase in iron ore prices is likely to bring about an increase in downstream business costs, Zhao Zhiming believes that companies can absorb the pressure of rising costs in varying degrees by strengthening management, saving energy and materials, improving processing technology and expanding exports. In addition, according to analysis by industry experts, due to the appreciation of the renminbi and the expected decline in sea freight, there are also two factors that may offset the rising cost of this round of price increases.
On December 21st, Baosteel took the lead in grabbing the world premiere rights in the first round of international iron ore negotiations and reached an agreement with the world's largest iron ore producer Brazil CVRD on the 2007 international iron ore benchmark price. As a result, the price of fine ore produced in the north and south of CVRD will increase by 9.5% on the basis of 2006 respectively. The reporter learned from the relevant parties that this round of price increases will have different degrees of impact on different industries and companies in the production of petroleum and chemical equipment. It will also inspire relevant companies to take various measures to resolve the upward pressure on costs.
For downstream industries such as petroleum and chemical equipment manufacturing, the impact of price increases on iron ore and steel is manifold. According to Zhao Zhiming, secretary general of the China Petroleum and Petrochemical Equipment Industry Association, in the petrochemical equipment industry, such as vessels, towers, and heat exchangers, the cost of raw materials accounts for about 70% of the total cost, while steel costs account for 85% of the cost of raw materials. about. Each round of price increases will bring about an increase in costs. In 2003, the rise in the price of iron ore and steel made the chemical equipment manufacturing industry worse. The purchase price of steel products generally rose by 30% to 50%, and the total industry loss was 249 million yuan. Since 2004, with the drive of investment in the domestic petrochemical industry, the concentrated release of new steel production capacity and the intervention of the national macro-control, as well as the rapid growth of oil drilling equipment, rubber equipment and other exports, China's chemical equipment industry has finally reversed The industry's loss-making situation, product sales revenue, total profit, export delivery value and other major indicators have maintained an annual growth rate of 20% to 30%. The price increase of iron ore and potential steel price increases have little impact on the production of oil and gas drilling equipment, but may have a relatively large impact on downstream petrochemical and chemical equipment manufacturing. According to Jiang Lin, deputy chief engineer of Jinzhou Heavy Machinery Co., Ltd., after the price increase of steel products, not only the procurement costs will increase, but the procurement cycle will also be extended, especially for special steels such as thick plates, because there are few domestic production enterprises and the capacity is saturated. It is also in short supply in foreign countries, and the difficulty of procurement will increase.
Although the increase in iron ore prices is likely to bring about an increase in downstream business costs, Zhao Zhiming believes that companies can absorb the pressure of rising costs in varying degrees by strengthening management, saving energy and materials, improving processing technology and expanding exports. In addition, according to analysis by industry experts, due to the appreciation of the renminbi and the expected decline in sea freight, there are also two factors that may offset the rising cost of this round of price increases.
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