The Research On Iron Ore Negotiation And China's Loss Of Pricing Power

At present, China has become the largest buyers in the international iron ore market. Although the import quantum is continually increasing, the international iron ore price is also rising sharply instead of going down which impacts our domestic iron ore market. The cost of the iron and steel industry and their lower reaches estate cost rises, while the profit comes down, which also affect the national economy.The reason of this situation is that the world three big iron ore suppliers are controlling 70% of the market share, which forms, the international iron ore marketplace oligopoly. The international iron ore price is decided from the yearly iron ore price negotiation. Game of the negotiation process is similar to bargaining with somebody for a supply of something, and the ultimate respectively square negotiation avails depends on whose bearing capability to negotiation postponement cost.But our country present steel and iron profession concentration level is low and the competition is in disorder, which seriously weakened the domestic steel business power in the iron ore price negotiations bargaining. Simultaneously the continually expansion of our country steel and iron produces has caused the rigid demand and dependence to three big iron ore suppliers of our country. All the above reasons cause our country enterprise lower than the negotiations matches greatly in iron ore price negotiations extension cost bearing capacity, as well as the import iron ore price successive years largely rise and the cost stays at a high level.In order to make better use of abroad iron ore resource, view abroad iron ore supply and demand problem more objectively and improve our country utterance right in the international iron ore price negotiation, our country needs to broaden the iron ore entrance source, promote exploit overseas and reduce the dependence to the single supplier. At the same time, administration should reinforce domestic iron ore trade order and build-up feasible iron ore estate early warning system to remove the hidden troubles that may occur in national economy development, in order to defend our country resource safety and economic security, which will have important theoretic and practical significance on our country iron ore negotiated price ability research. Moreover, the statement of our country iron ore negotiated price ability analysis and suggestion will have reference value to other bulk commodity foreign trade.