The rise of nanometers

Just when the global ore market is undergoing a sudden change.

The three major international mining groups had no choice but to announce on November 16 that the CIF price of iron ore would be reduced to 680-720 yuan per ton and that of bauxite to about 210 yuan per ton.

This price reduction has temporarily stabilized the steel companies in Japan and Korea, as well as the steel companies and aluminum companies in other regions, and they have also become more comfortable.

Just lowering the price will cause their stock price to plummet further. After all, lowering the price means that Rio Tinto's profitability will decrease.

But in order to maintain market share, they had to adopt this solution.

However, in order to avoid a stock price collapse, Rio Tinto announced that it was launching a share buyback plan, followed closely by Vale and BHP Billiton, which also announced the launch of share buyback plans.

It was only on November 27 that the stock prices of BHP Billiton and Vale stopped plummeting, while Rio Tinto was still falling slightly.

But they don’t know that the real storm is already hidden in the futures delivery period.

The Huanghua Town Mine in Jiujiang, Gan Province, and three other mines collected 760,000 tons of pure iron powder for Baosteel.

The pure iron powder was loaded from Poyang Lake on a transport ship, then flowed down the Yangtze River and arrived at Baosteel's steel plant one day later.

After obtaining the pure iron powder, Snail Steel engineers came with the transport ship to instruct Baosteel on how to process the pure iron powder.

Inside the electric furnace workshop of a steelmaking plant.

Chen Guangrong personally checked the situation of pure iron powder, and Li Xingdu, the vice president in charge of technology, and several technicians, wearing protective equipment, carefully inspected the iron powder.

In order to facilitate transportation and storage, Blue Star Mining's pure iron powder is stored in cube storage boxes with a side length of 3 meters. These storage boxes are products customized by Blue Star Mining from Snail Industry.

Because pure iron powder is very fluffy, it must be compressed to increase the storage weight per unit volume. It is also for convenient storage, because the sealed storage box will be filled with nitrogen to reduce the oxidation of pure iron powder.

After opening the seal, it must be used within a week. If it cannot be used immediately after opening, Blue Star Mining recommends sealing it again and filling it with nitrogen to prevent the pure iron powder from being oxidized.

The iron powder was fed into the electric furnace, and then according to the guidance of Snail Steel engineers, they added corresponding trace elements and carbon powder to prepare for smelting a batch of low carbon steel.

When the red molten steel was poured into the mold, Chen Guangrong and Li Xingdu looked at each other, feeling very uneasy in their hearts.

Because pure iron powder can really be used directly for steelmaking, and the electricity consumption is greatly reduced. By skipping the step of smelting pig iron, the cost per ton is instantly reduced by about 1,600 yuan.

Although Blue Star Mining has provided instructions, nothing in the instructions can compare with the shock of seeing it with your own eyes.

Before, they thought that they would be satisfied if the cost could be reduced by five to six hundred at most. Now Chen Guangrong and the others truly realized the horror of Suiren Company.

Li Xingdu, who was writing and drawing on his notebook, raised his head and said: "Glorious, I have estimated that if it is used for iron smelting, the cost will be reduced by about 1,000. If the pig iron smelting stage is skipped directly, the cost will be reduced by about 1,600. "

"It seems that the cost of directly using it to make steel is even lower." Chen Guangrong immediately grasped the key point.

Li Xingdu sighed with emotion: "After all, it is done in one step, reducing the intermediate links, and the cost savings will naturally be more obvious."

"No wonder Blue Star Mining is so confident. It turns out that the cost reduction brought by pure iron powder is so huge."

Li Xingdu nodded: "Yes! The cost gap between iron ore smelting and pure iron powder smelting is too big. It is estimated that other steel companies have also discovered this key information."

"I had some ideas about Vale's iron ore before, but now it seems that Blue Star Mining can only take over." Chen Guangrong spread his hands helplessly.

Several other executives felt the same way.

The current situation is not that Blue Star Mining is begging them to buy pure iron powder, but that steel companies cannot refuse pure iron powder.

Because refusing to purchase pure iron powder is no less than cutting off the road ahead. Other companies use pure iron powder, and their production costs drop by thousands of yuan per ton.

As for iron ore smelting, even if the iron ore of the three major international mining groups has dropped to an average of 700 yuan per ton, the comprehensive cost of pig iron per ton still reaches about 2,500 yuan.

When smelting pure iron powder, the cost per ton of pig iron is only about 2,000 yuan. You can also directly skip pig iron smelting and enter the steelmaking stage, further reducing production costs.

Unless the three major international mining groups are willing to cut prices again and lower the CIF price of iron ore to 411 yuan per ton, they can barely compete with pig iron smelted from pure iron powder.

When it comes to steelmaking applications, the advantages of iron ore are further lost. The price of iron ore must drop below 59 yuan per ton before it can compete with pure iron powder.

Iron ore is priced at 59 yuan per ton, an almost impossible price.

If Rio Tinto really sells at this price, they will lose about 141 yuan per ton of iron ore on average.

This is such a bummer, it’s a cost-effective massacre.

Moreover, through his connections, Chen Guangrong found out about the purchase price of pure iron powder from Tongshan Iron and Steel Co., Ltd., which was a preferential price given by Blue Star Mining, which was 1,200 yuan per ton.

This proves one thing, that is, the current pure iron powder futures price, Blue Star Mining still has a buffer of at least 270 yuan per ton.

Basically, Blue Star Mining is one of the three major international mining groups.

If United Recycling and Beijing Enterprises Resources were not able to supply pure iron powder, domestic steel companies would really have trouble sleeping and eating.

Chen Guangrong has some speculations in his mind. It is estimated that Suiren Company is worried about anti-monopoly and deliberately supports United Water and BEWG.

However, Suiren Company actually has extraordinary influence on Beijing Enterprises and United. After all, Suiren Company holds the patents and core technology consumables, which is equivalent to having their balls pinched.

This is why both United Recycling and Beijing Enterprises Resources accept the industry leadership of Blue Star Mining because they cannot do without Suiren Company.

Chen Guangrong found Ding Lixing, who was in charge of iron ore negotiations, and asked him to delay as much time as possible. There was no need to cooperate with Vale.

Now he just wants to see when the three major international mining groups will fall apart.

Chen Guangrong even specially prepared asset appraisal documents and a business investigation team. Once there is a problem with the three major international mining groups, Baosteel will never show mercy. If he does not take the opportunity to tear off a piece of flesh, he will feel sorry for himself.

Just when Baosteel discovered the benefits of pure iron powder smelting, other domestic steel companies also obtained pure iron powder one after another.

When the effects of pure iron powder smelting became known to most steel companies, the number of companies that chose iron ore to default on their contracts also rapidly increased.

As a last resort, Rio Tinto lowered its ore prices again, causing iron ore prices to fall below 500 yuan per ton.

Just doing this caused their stock price to plummet once again. This kind of poison quenches thirst.

The headquarters of the three major international mining groups finally took a soft stance and ordered Charles, Beria and Juan in China to invite Suiren Company to restart negotiations.

However, their surrender did not stop Blue Star Mining from attacking. The futures quotations on the Dalian Exchange remained at the previous position.

Moreover, Blue Star Mining, United Recycling, and Beijing Enterprises Resources are gradually increasing the development and production of mines, further driving down the cost of ore and turning ore trading into an unprofitable business.

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