Study On Price-setting Power Of China's Iron Ore Import

Iron and steel industry is a pillar industry in the national economy. Iron ore was the main raw material of steel and iron production, price of iron ore was directly related to the development of steel industry and all sectors of national economy. With the rapid development of steel industry of our country, China became the biggest import country of such product from 2003, import of iron ore increased by a big margin and amounted to 275 million tons in 2005, accounting for 43% of total world sea trade of iron ore. At present, China's steel industry has already spent more than 50% of its iron ore imports. More than 90% of the new global iron ore consumption is for China. In recently years, due to the lack of iron ore price-setting power, China only passively accepts a fait accompli, causes a major economic loss, and becomes the biggest victims. Therefore the topic of China's price-setting power on iron ore has aroused great concern among people from all circles.This thesis focuses on the analysis of iron ore production and trade situation, Firstly, on the basis of lots of data and graphs, the thesis starts with an overall analysis on international iron ore market, illustrates respectively the international and Chinese iron ore production and trade, and through the path of China contesting the price-setting power, analyzes the basic factors affecting the iron ore demand in our country relation to the iron importing practice, with emphasis on the situation of China's lacking international price-setting power.Then, on one hand, the thesis makes study on iron ore oligopoly market, by using the bargaining game model, analyzes the current international iron ore pricing mechanisms for analysis, and proves the reasons for lack of price-setting power by using Game Theory. Further analyzes the weakness of China Steel enterprise alliance. On the other hand, the thesis analyzes the function of the futures market, and the great significance of setting up futures market to price-setting power. Considering that the conditions for establishing the iron ore futures market is maturing now in China because of the development of market economy, the plan of how to set up the iron ore futures market is put forward.Finally, based on the experience of foreign contries for reference, gives the suggestions on how to get the pricing power, which includes opening up more mines overseas, establishing iron ore strategic reserve, strengthening the union of our steel industry and developing futures market and scrap resources.