The Empirical Analysis Of The Iron Ore Price Affecting Macro-economic

Iron and steel industry,as the foundation of the national economy, the level of developing always consider as one of the important indicators to judge one country's industry developing level and comprehensive national strength. Iron ore is the raw materials of Iron and steel industry, in china, the cost of iron ore raw materials is about 40 percent of the whole Iron and steel industry. The price increase of iron ore must influence the price of iron in China, though the further transmit and of industry chain , the effect will permeate to the industries that rely on iron industry, such as : construct, machine ,light industry , car making, container ,ship making, railways, Petroleum &Petroleum Refining and the others, more then to precipitate the increase cost of under industry and the higher step of the index PPI, finally leads to the increase of the whole society CPI ,also the macro-economy and living of people. With the rapidly increase of Chinese economic aggregate and the import of Iron ore , the influence to Chinese economic aggregate by the fluctuating prices of international iron ore was becoming much more obviously. Know and distinguish the influence, would be very important to confirm the tactics of Chinese strategy resources.Based on the research of articles , use the VAR and VEC , though the Cointegration and test check, Granger reason and result check. impulse response analysis and variance decomposition to prove and do the research the fluctuating prices of international iron ore really do influence to Chinese economy.1,By the study of VEC model with three variables : the growth of GDP,the consumer price index and the international iron price ,the result show the international iron price fluctuation on China's macro-economic: the decline on China's GDP growth, and the risen of the commodity price; In the other hand: the China's growth rate will lead the risen of the international iron price.2,The article using cointegration theory,the error correction model and Granger causality test study the impact on domestic steel prices from international iron price fluctuation. The results shows that there is long-run equilibrium relation between domestic steel prices international iron price—the cointegration relationship. Each 0.1% fluctuation on the international iron price, the domestic steel prices will change 0.4% in the same direction; the international iron price is the Granger reason of domestic steel prices. 3,According to the pathway of iron price transduction, the article use the vector autoregression(VAR),the impulse response function to study the impact on the steel industry and the automotive industry cause by risen of international iron price. The result shows that: The risen of international iron price led to the decline on the profit of the steel industry and the automotive industry.