China's International Iron Ore Pricing Missing Economics Analysis

With the rapid development of China's economy, the construction is carrying out in full swing, and the demand for steel is growing. The resources of iron ore as steel factor, is bound to become an important strategic resource. As the resources of iron ore is wide rather than rich and high-quality mine, the international iron ore imports growing, and becoming increasingly dependent. Since 2003 China's joined the international iron ore negotiations, the international iron ore oligopoly producers made the international iron ore prices rising by controlling production, increasing shipping prices and using the negotiation strategies and other means. This not only made heavy impacts on the domestic iron ore market, steel and downstream industries, but also caused some more severe problems of iron that our country have to face with. Iron ore resources has become the bottleneck for the steel industry, and the relative paucity of resources and highly dependent on the outside made China the exploit object by international mining giant, traders, shipping companies. Iron ore pricing has caused the community, especially the concern of scholars home and abroad. Therefore, increasing China's bargaining power in iron ore price negotiations has become an urgent task for China.This Paper systematically analyzes the current market situation and status of iron ore. Looking for the reasons for China's lack of international pricing using the method of combining theoretical analysis and mathematical analysis, through the traditional economics of supply and demand relations and the new model of bargaining power. The results show that: Lack of international pricing of iron ore in China due to the current iron ore market oligopoly structure and the lack of bargaining power of our domestic steel industry. Reference to the summary of the reasons and using the bargaining power model, we can find the ways of improving the pricing power both from domestic and foreign aspects.Paper is divided into four parts:The first part uses a lot of data and charts to understand patterns and current status of the international iron ore industry. By analyzing the demand side and supply-side strength of the iron ore market, the paper will compare the strength of both supply and demand. This analysis made for the following reasons for bedding, and this part also describe the pricing process.The second part described the status and influence of our lack of pricing power. Not only the steel industry, but also many downstream industries and the CPI index also are affected in a significant. The acquisition of iron ore pricing is of great significance to the maintenance of security and economic security of resource.The third part is the analysis of the reasons for the lack of international iron ore pricing. Model based on the construction of economic theory to quantify the function of a more scientific analysis of iron ore supply and demand sides of the game.The fourth part propose a solution from at home and abroad based on the foregoing summary of the reasons.