For steel mills, the good news has come with the bad news. The good news is that iron ore prices have finally loosened in the last three quarters. The bad news is that steel prices have also dropped.

The biggest factor affecting steel mills' profits this year has been the rise in iron ore prices, which have caused problems in Brazil and Australia, two of the world's biggest producers, with tailings accidents in the former and hurricane disasters in the latter leading to sharp falls in iron ore production, and strong demand from China. According to cisa monitoring, at the end of September, China's steel price index (CSPI) was 106.09 points, down 0.96 percent from the beginning of the year, down 15.55 percent from the same period last year, CIOPI imported iron ore cif price rose 30.31 percent from the beginning of the year, up 22.07 percent from the same period last year.

In the first three quarters of the basic no change, steel prices and the cost of raw materials mainly iron ore rises a lot, so a lot of steel mills blamed the rise in iron ore prices for the falling profits, such as angang steel (000898) published 2019 years ago in the third quarter, according to preliminary results are expected in the first three quarters of this year net profit fell by about 74.88%, angang explains one reason is that the international mining giant vale of dam failure events. Tisco stainless steel (000825) expects net profit to fall by 58.14% to 50.75% in the first three quarters, for much the same reason given by anshan.

In the first three quarters of steel mills and the industry association in deal with iron ore prices, and now there was good news, on October 16, according to the report, Australia iron ore giant Rio tinto said, due to the increasing demand for Chinese buyers, the company in the third quarter shipments of iron ore reached 86.1 million tons, edged up 5% compared with last year. Rio tinto's confidence has been boosted and it is also forecasting iron ore shipments of 320m to 330m tonnes this year. In the third quarter, vale's iron ore production rose 35.4 per cent from the previous quarter to 86.7m tonnes. Production has also resumed in Brazil, where iron ore capacity has been restored faster than expected.

China imported 99.13 million tons of iron ore last month, the highest level since January 2018, and the port has reached 120 million tons, easing tensions.

The iron ore giant acted quickly, the iron ore price fell, if the steel price did not change, the steel mills will start to make money again, but unfortunately, the steel price also fell, rebar has been depressed for the last two months, the last two weeks are still falling. Although the inventory has a rising trend, the steel mill has no incentive to limit production now, and can only suppress the price of another important raw material -- coke. After all, the steel mill is still strong, so the price of coke has dropped, but on the other hand, the profit of the coke enterprise will be affected.

In recent years, when the north entered a cold winter, many analysts were counting on the government's environmental curbs to bring steel prices back up. A few years ago, because of environmental protection issues, steel prices have rebounded, steel mills did not have a hard time. For example, hebei province, a major steel province, is to cut its steel capacity by 14 million tons by the end of this year. Of course, China's steel production is still growing rapidly, accounting for half of the world's total. Steel demand from the end of the steady flow of successful digestion of steel mills increased production.

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