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《2010年2季度中国金属与矿产行业分析报告》汇丰银行(80页).rar
Tightening fears a buying opportunity
as 2Q peak demand season approaches
 Triggered by surging prices, domestic
iron ore output is making a comeback
 Reiterate OW steel and coal shares, stay
cautious on base metal exposures
Chinese supply could crash the iron ore party – positive for
steel. As imported prices surge towards USD150/t (cfr), we
focus in this Monitor on China's domestic iron ore miners.
Squeezed out by low iron ore prices last year, domestic iron ore
mines supplied less than 30% of China's steel mill
requirements. However, at current imported prices nearly all
domestic mines are profitable, which we estimate could unleash
c220mt (at 63% Fe) of supply this year. Equivalent to about
one-third of last year's imports, this additional supply could
bring China's self sufficiency back to historic levels of c50%
and place downward pressure on iron ore prices. In this
scenario, profit margins for steel mills may benefit from a move
to shorter-dated, market-based iron....