Brazil exported 33.68 million tons of iron ore in June, the highest level in nine months, according to government data, as major iron ore producers such as Vale ramped up production in response to rising global prices.
Exports in June rose 12.2 percent from a year earlier and 26.3 percent from the previous month, the data showed, following a sharp rise in national commodity prices, with iron ore prices supported by strong demand from China.
It is worth mentioning that China's import of recycled iron raw materials is the first ship of renewable resources imported after the gradual implementation of zero tariff. With the preferential tariff, it is believed that more and more recycled iron resources will continue to enter China in the future.
As Australia's iron ore prices have gone up unchecked, however, China has to curb the rise in iron ore prices. As we all know, China is a manufacturing and infrastructure power that attracts worldwide attention. Modern industry and infrastructure construction need to consume a lot of steel resources. However, China is also a big importer of iron ore, so the price of iron ore must be lowered, or the Chinese economy will suffer a big loss.
Therefore, the tariff reduction of imported recycled steel materials will be one of our "combination of fist". As a big importer of iron ore, China should have corresponding pricing power, and China's strategy is mainly divided into the following points. The first is to increase the production of domestic iron ore. Although China's iron ore is of lower grade than Australia's, Australia's iron ore advantage is no longer obvious under the high price of imported iron ore.
The second is to accelerate the progress of foreign investment, the main purpose is to cooperate with Guinea Simandou iron ore project, where the iron ore grade is not only high, but also is very easy to process red ore, can be said to be comparable to Australia's high-quality iron ore! The last is to limit the production capacity. With the high price of iron ore, there is no need to chase up the high price at this time. We only need to limit the production capacity appropriately to drive down the international iron ore price.
The above strategies have achieved good results. In a short time, the price of iron ore in Australia has fallen to $180 / ton, and the overall decline is at $50 / ton. It can be seen that Australia wants to use iron ore as a trump card to win over China. And Australia iron ore is irreplaceable, Australian iron ore is skyrocketing, before the main cloud problems due to the Brazilian iron ore supply is end, Brazil's CVRD iron ore in 2019 tail dam dam failure happened to encounter, then iron ore production has been at a standstill, and Brazil also suffered a serious epidemic, Eventually, it had to lead to a shortage of iron ore capacity.
At present, Brazil's iron ore production has been gradually restored, China's iron ore quantity is increasing, coupled with foreign investment in African iron ore projects, I believe that in the near future, China will no longer need to use high-priced iron ore, and then Australia's iron job will be lost!
