| The steel industry is the pillar of human beings' production and development, its development or not determines a country's industrial progress. With the development of our industrialization process, especially the rapid development of real estate,shipbuilding, and railway industries, the demand of steel is growing day by day. As the main raw material,the rapid rise of iron ore price in recent years leads to serious threats and challenges to steel industry of China. For this, this paper analyses the influence mechanism of the change of iron ore price to steel industry.Firstly, this paper adapt production factors price theory to analyses the influence of iron ore price' change to steel industry, establish game model between suppliers and demanders, and then use econometric model based on the quarterly data from 2001 to 2009 to do empirical analysis. Finally we propose some policies and advice.Through the analysis based on production factors price theory we conclude that:Within a short time, iron ore price' going up will reduce the steel output, at the same time lower the corporate profits, but not affect the price of steel product. In the long run, iron ore price' going up not only increase the output of steel, but also propel steel product prices, but the long-term profit is zero.By establishing game model we conclude that:No matter what measures the iron ore suppliers take, steel enterprises have to hold on long talk, but there is a problem about probability q.From the current international and China's domestic environment, the q is so small,but steel enterprises must combine all possible forces to stick to long-term negotiations to improve our country's power in international negotiations.Using econometric model this paper analyses the influence of iron ore price for steel production, steel product prices,profit and structure of the industrial'future.The index about the change of iron ore price to steel production is-0.045,while the index for steel product price is 0.465.The influence on profit of large steel companies and middle-sized enterprises caused by iron ore price' going up is different. The steel companies improve products'price while the small and medium-sized enterprises even go bankrupt. The influence in steel structure mainly shows in two ways:one is the concentration' improvement of steel industry;the other is the adjustment of industry structure which includes the adjustment in organization, structure of product, allocation of personnel,replacement of setout and distribution of investment.At last, according to the conclusions this paper propose suggestions in four aspects which are pricing power, changing supply structure, development of enterprises and the development of the government functions. |
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