Iron ore prices are not afraid of Chinese steel stocks.

<P> [Industrial observations] bet on RMB appreciation to China for iron ore prices by 9.5% on July 21, Baosteel Group, took the lead with Papua New Vale (CVRD) reached agreement in 2007 iron ore prices; 22, Baosteel and with .in the world --- the other two major iron ore producers BHP Billiton (BHP) and Rio Tinto Group (RioTinto) Hamersley's company reached an agreement: powder ore and lump ore prices will be based on prices in 2006 .were up 9.5%, respectively. .Under the pressure of rising costs, steel stocks fell across the board last week, such as Baosteel and Wuhan Steel shares have fallen 4% of the shares. .But the industry that the actual impact is not the dominant iron and steel stocks may continue to concern. .</ P> <P> costs 50 yuan per ton </ P> <P> iron ore prices rose 9.5%, for iron and steel enterprises, means that the costs will therefore rise, according to research agency estimates, the cost per ton of steel .will rise between 47 yuan to 60 yuan. .</ P> <P> such as CITIC Securities is expected to increase the cost 47 yuan per ton; based on estimates of gold, iron ore, after rising 9.5%, CVRD standard powder ore price from $ 42.8 / ton up to 46.9 U.S. dollars / ton, up .$ 4.1 / t, up to the current exchange rate of RMB 31.8 yuan / ton, according to consumption of 1.55 tons per ton of steel, iron ore terms, costs will rise 49.3 yuan per ton; and Everbright Securities believes that the pig iron costs 50-60 yuan / ton .; Guoxin Securities assuming the 2007 level of international sea freight was flat in 2006, the country imported iron ore in 2007 the structure does not change, according to 7.8 of the RMB exchange rate, the average CIF price of iron ore in 2007 will rise by 37.55 yuan, .the cost of 60 yuan per ton. .</ P> <P> practical impact may be small </ P> <P> for the iron ore prices to the real impact of iron and steel enterprises, most of the research that the impact is very limited. .</ P> <P> first appreciation of the renminbi would reduce the actual gain. .Gold in that year the RMB continues to appreciate against the U.S. dollar appreciation in 2006 was 3.1% appreciation in 2007 is expected to more than 5%. .Since iron ore prices in dollars, but on a monthly basis, to offset part of the continuous appreciation of Renminbi price factors. .</ P> <P> followed by iron and steel products may use the opportunity to raise prices. .2007 will be China's steel industry, eliminate backward production capacity of the critical period, with production capacity and backward production capacity out of slowing Chinese steel production growth will continue to decline, to maintain balance between supply and demand situation is expected in 2007 will be higher than the average price of domestic steel products in 2006. .Iron ore prices on the one hand reflects the steel demand and steel prices in 2007 to judge the situation is relatively optimistic, the other hand, steel mills raise steel prices for the future to find a reason. .Anshan Steel and Wuhan Steel is expected to be issued in January 2007 may be a slight increase in steel prices. .</ P> <P> advantage of iron and steel enterprises concerned </ P> <P> analysts believe that, just from the existing business structure and look for the sources of procurement of iron ore, ore production and imports of high-end products, the proportion of companies with fewer .more cost-advantage, for this type of iron and steel enterprises such as Baosteel, Wuhan Steel shares, Angang Steel Company Limited, TISCO Stainless Steel, New Steel and Vanadium, Jiuquan Hongxing and S Laiwu Steel, etc., may continue to pay attention. .</ P> <P align=center> </ P> <P> Baoshan Iron & Steel (600019): CITIC Securities that the company's cost by the price of iron ore and nonferrous metal prices have little effect. .With heavy plate, stainless steel and 1800 cold and three hot, five cold commissioning, production and yield of expected earnings growth of 20% in 2007, earnings per share of 0.90 yuan. .</ P> <P align=center> </ P> <P> New Steel and Vanadium (000 629): New Steel and Vanadium ore currently used by more than 85% from the Panzhihua and surrounding areas, it only imported ore .small part, and is intended primarily as smelting ore, the international iron ore prices on the New Steel and Vanadium less affected. .The iron ore prices to highlight the advantages of its own resources. .</ P>.