Research On Market Structure And Market Power In Manganese Industry

As an important strategic metal in our national economic development, manganese and alloys are also an essential basic bulk raw material in iron and steel industry. China’s manganese industry is currently faced with a situation of extreme scarcity in domestic high-grade manganese ore resource, which production and sales are all controlled by the international mining giant. Their constant merges and acquisition activities have shaped the state of oligopoly market structure. The needs to high-grade manganese ore resource in our country are facing severe situation. The promulgation of China’s anti-monopoly law provides a legal foundation to maintain market competition of Chinese manganese industry.Along with the implementation and enforcement of our national Antimonopoly Law, the extraterritorial application of the Antimonopoly Law becomes a difficult problem. Not only legal foundation, rational foundation, but also extraterritorial investigations and system design all challenge extraterritorial enforcement of the Antimonopoly Law. Based on such background, the purpose of this dissertation is to study the current situation of manganese ore market, including market structure, pricing mechanism and market performance, aiming to analyze comprehensively the market power of manganese ore, then attempt to provide a reference to the extraterritorial implementation of China’s Antimonopoly Law.The main conclusions of this dissertation are as follows:Firstly, by analyzing the characteristics of market structure in manganese ore resources, this dissertation found that our national manganese ore resource endowments is of low coefficient, high grade manganese ore resource is extremely scarce, therefore our demand for manganese ore is totally dependent on offshore purchase or strengthening the comprehensive utilization of existing domestic resources. As resources products, the productive market of manganese ore belongs to the type of oligopolistic market structure. Secondly, due to the low barriers to entry our national manganese industry it results in large amounts of capital accessing to the market, the exceeded demand of productive capacity, intense pricing competition, insufficient government supervision,the absence of a strategic reserve strategy, and the loss of strategic resources. This dissertation found that there are two aspects Chinese manganese industry market structure and national policy which lead to the lack of market power in China’s manganese industry. Thirdly, the existing international yearly manganese ore price negotiations controlled by international mining giant cannot fully reflect the demand of China’s interest. As the first major nation of demanding for manganese ore, however, our nation has no ability to intervene the price of manganese ore, to price the manganese ore products; instead, our country unwillingly plays a role of passive recipients on price fluctuation. Therefore, the manganese industry in China should accelerate the upgrade of industry concentration, increase economies of scale and standardize the market competition order and thereby enhance the ability in annual price negotiations in manganese ore industry. Finally, with the constant merge activities among foreign mining companies, our nation must quickly improve and refine the principles and conditions about the implementation and extraterritorial application of our Antimonopoly Law, including reporting methods and standards, the starting of extraterritorial application, enhancing the establishment of international coordination system for our antimonopoly extraterritorial application, in order to ensure our national market competition order in manganese industry.The dissertation is mainly composed of the following parts:Chapter 1 mainly introduces the subject, significance, content, methodology and structure of the dissertation.Chapter 2 is primarily a literature review on paper researches about existing market structure, classification, measurement methods, market power, and reviews the theoretical measure theory of market power. As well this chapter introduces the existing papers of domestic and foreign researches on measurement of market power. This chapter focuses on reviewing about the perspective of domestic market structure and market power from theoretical and empirical aspects, evaluation of existing research findings, and through the obtained methods to provide a theoretical support for further research.Chapter 3 provides a basic analysis and research on technical and economic characteristics of manganese. This chapter also summarizes the characteristics of manganese products and some relevant market analysis and development prospects in manganese ore industry. Besides, chapter 3 aims to clear manganese market structure, including the detailed study on market concentration, entry and exit barriers, product differentiation. From the perspective of market pricing mechanism, this chapter introduces the reality of manganese market pricing conditions, thereby through profitable performance evaluation and market competitive performance evaluation to make a clear analysis on manganese market structure. Chapter 4-5 are the empirical parts of the dissertation, which are also the core of it. Chapter 4 summarizes and proposes quantitative methods used in this article. Based on it, for the first time, chapter 5 attempts to use empirical method to extend the buyer-supplier model, on the basis of data collation and models processing, the analysis is carried out about the handling of the regression and thus the overall regression results are evaluated, thereby draw the final conclusion. It analyzes reasons about the insufficiency of buyer’s market power in our nation, and tries to do a research on the form of buyer power and the reality factors which affects the formation of buyer power. After studying the market behavior of firms in manganese industry, the reality of buyer- supplier power is analyzed in chapter 6.Chapter 6 is the analysis and research on the extraterritorial application of Antimonopoly Law. It introduces the content of and its theoretical foundations. On this basis, through specific analysis of the extraterritorial application of Antimonopoly Laws on the merger of manganese ore, the problems existing in our nation are studied. In the end of this dissertation, according to research findings in previous chapters, some recommendations on how to improve Mechanism in Chinese manganese industry are proposed.Nevertheless, both from the theoretical and empirical views, research on the market power measurement in manganese industry and the specific reality study on the extraterritorial application of Anti-monopoly Law still need to be improved in the future. So the conclusion part of the dissertation provides some issues and directions that are worthy of further study.