WISCO reduces iron ore procurement costs by RMB 900 million

In recent years, under the constraints of the three largest iron ore giants in the world, Wugang’s iron ore procurement costs have increased year by year. The reporter learned from WISCO yesterday that this year, Wuhan Iron and Steel Corp. has used its own ore, spot ore and long coal mine portfolio on iron ore to break the monopoly and is expected to reduce the purchase cost of iron ore by nearly 900 million yuan.

According to reports, for a long period of time, 80% of iron ore from Wuhan Iron and Steel Group relies on imports. Once a year, intensive negotiations, unified pricing, and signing of agreements make Wuhan Iron and Steel, like other steel plants, subject to the monopoly of international mining giants. Ore prices have remained high.

Since 2009, Wuhan Iron and Steel has accelerated the pace of “going out” and has contacted several national mineral companies with rich iron ore resources in Canada, Australia, Brazil and Venezuela, and successfully signed the total of nearly 3 billion tons of iron ore in the four countries. Resources. Among them, Wuhan Iron and Steel and Venezuela Mining Group Corporation successfully reached a long-term procurement contract and the five-party agreement, the agreement became the first to explicitly implement the "China price" contract, breaking the barriers of the three major international ore giants.

According to reports, since the beginning of this year, the price of international iron ore has still fluctuate greatly. WISCO has implemented the peak load to purchase ore, and has purchased large quantities at low prices, which has greatly saved costs. For example, in mid-March of this year, Wuhan Iron and Steel, through business intelligence analysis, seized the low point of the market. At the peak, it purchased nearly 300,000 tons of powder ore and directly reduced the cost by 8.6 million yuan. In October, in the event that the price of the long-term ore mine was higher than that of the spot mine, Wuhan Iron & Steel had decisively turned off the two captains' ore mines and purchased spot mines, reducing the cost by 10%.

According to industry analysts, at present, most of the domestic iron and steel enterprises are in a state of low profit or loss. The profit rate of key large and medium-sized steel enterprises' sales revenue is 2.91%, which is far below the average level of 6.2% for industrial enterprises in the country. The cost of inland iron and steel enterprises like Wuhan Iron and Steel has also increased year by year. In addition to extensive absorption of overseas owned mines, the flexible procurement model can more directly create benefits for enterprises. At present, Wuhan Iron and Steel's iron ore procurement model is not only praised by the industry as the "Wugang Model", but also by other domestic companies to follow suit.