Study On The Price Mechanism Of Iron Ore And Marketing Strategy Of Haikuang Group

Iron ore is the main raw material for producing the steel. Because China’s production capacity of iron ore can not meet the demand of steel industry, every year we import a lot of iron ore from abroad to resolve the contradiction between the supply and demand. Because the fluctuations of iron ore’s market price have a significant impact on the development of China’s economy, so we need to explain and predict the price of iron ore. To meet this requirement, we need to study the pricing mechanism of iron ore at first.By the combined method of qualitative analysis and case studies, on the basis of studying the market price mechanism of iron ore, taking the Haikuang Group as a case to apply the price mechanism theory to the analysis of specific company sales of iron ore, this thesis gives recommendations to the marketing strategy of a company.At the beginning of the thesis, the theory of multi-price of primary products is introduced into the price analysis of iron ore market. However, according to the multi-price theory, internal transfer, long-term contracts and spot market are the three simple and separate pricing methods. Within each pricing method, there’s no diversification. But in the real world, contractual arrangements are various, in gradual transition. In addition, the multi-price theory is based on theoretical model of the market risk of product and uncertainties. Its purpose is to build a mathematical model to analyze the balance between different prices, rather than the risks and uncertainty faced by the main market players. Therefore, in order to truly explore the contractual arrangements, organizational forms and appropriate pricing mechanism of iron ore market, the multi-price theory and contract theory must be combined together as an organic way of analysis.Although this thesis divides the iron ore market into three sub-markets:the vertically integrated market, long-term contract market and spot market. However, after analysis of the three sub-market price mechanism separately, through contractual arrangements, axes organically combine three sub-markets into a whole, and allow us to study the interrelationship between the various sub-markets. Through analysis, we find that the vertical integrated market of iron ore is relatively independent, and affects less on the price mechanism of the other two markets (although the price mechanism under strong excitation mechanism is close to a long-term contract market price mechanism). The price mechanism of long-term contract market and the price mechanism of spot market are mutually and reciprocating interrelated. The study find that the price mechanism of long-term contract market has "snowball effect", that is, as the trading market players which enter the long-term iron ore contract increase, the costs of cash market transaction increase, the market participants’desire to enter the long-term contract market is stimulated. The interaction between the two market price mechanisms continues to push up the price of iron ore.In the sixth part of the thesis, the iron ore price mechanism discussed in the former part is applied to the analysis of iron ore marketing strategy of the Haikuang Group. And it provides theoretical basis and reasonable recommendations for the sales of Hainan iron ore and the marketing analysis of other similar minerals and raw materials.