The Iron And Steel Enterprises’Countermeasures Under The Background Of Pricing Financialization

Since2003,with China’s accession to the WTO,our country industrial explosive growth,demand for steel begins to maintain a rapid growth trend,China overtook Japan to become the world’s largest iron ore importer,the degree of dependence on imports of iron ore was gradually increased,the price of imported iron ore rises year by year,the general trend is:the price rises and quantity increases. With the world’s largest importer of status is not equal:China missing pricing power in international iron ore trade, under the background of imported iron ore pricing financialization, through the analysis of iron ore,so the steel mills in China should use what kind of financial tools to cope with change,which is of great significance.This paper will adopt the method of literature study, comparative study, case analysis and so on,analysis of the impact of financialisation trend of iron ore to steel mills in China,as well as deeply discussed:steel mills how to use financial tools to cope with change.This article is divided into five parts, the first part mainly elaborated this article research background and significance,literature review,research methods and framework arrangement,establish the research direction of this article;the second part is the function of futures market theory review,through the futures’two big functions (price discovery and risk aversion) literature,laid theory basis for the Chinese steel mills to swap; the third part through the iron ore trade development history and status quo analysis,analysis of under the historical background,China’s steel mills has been the lack of pricing power,the cause which must use financial derivatives to avoid risk;the fourth part mainly through strategies for the large steel mills in China and Japan’s experience for reference,summing up experience and lessons,and using the method of case study to highlight the major steel mills used to dissolve the risk of financial instruments,illustrates the necessity to swap;the fifth part suggests China’s steel mills and iron ore trading company through various financial means to resolve the risks of iron ore price fluctuationsFinally,the paper concludes that Chinese steel mills under the background of iron ore pricing financialization,swaps, through participation in the swaps hedge this risk at the same time, realize the healthy and lasting development, get rid of the situation of iron ore importing countries lack of voice, for large steel mills to reduce iron ore procurement risk is of great significance.