Due to historical reasons, Vale, Rio Tinto, BHP Billiton and FMG have formed a high degree of monopoly on global high-quality iron ore resources.
We have been seeking the pricing power of iron ore. 1, the earliest "long association" pricing of iron ore: Japan invested in the development of mines in the early days, and Australia exported the mined iron ore to Japan. Both parties sign a long-term contract, usually 15 ~ 20 years. The price formed under the "long association" pricing mechanism is called the open price in the international market or the annual benchmark price, which is the iron ore trading price for the next year determined by the annual negotiation between mines and steel enterprises.
2. China has joined the pricing system. At the end of 2003, Baosteel became the negotiator of China iron and steel enterprises, and formally participated in the international iron ore price negotiation for the first time. However, it did not play an important role in that year, and it was only a participant, still dominated by Japanese steel companies;
On February 22, 2005, Nippon Steel reached an agreement with Vale and BHP Billiton to raise prices by 7 1.5% respectively, which was the largest increase in the negotiation history.
In 2006, Brazil's Vale and Germany's ThyssenKrupp finalized the increase of 19%. Baosteel believes that this price does not take into account the China factor, and requests to continue negotiations. A month's hard work failed, so I can only accept it.
In 2007, Baosteel negotiated with Vale to get the initial price by raising the price by 9.55%, which was the first time that China iron and steel enterprises determined the iron ore price.
3. With the increasing demand for iron ore in China, the four major miners abandoned the "Xie Chang" pricing mechanism on 20 10, while Rio Tinto, BHP Billiton and Vale all abandoned the annual iron ore pricing mechanism and started to use the index pricing mechanism.
In the same year, Vale said that it would no longer announce pricing, and reached an agreement with all customers to establish a quarterly iron ore price mechanism based on the China spot market price index.
4. Platts Index-This index is compiled according to the spot prices of iron ore in major ports of China and China ports. It seems that we have pricing power, but we don't. Behind Platts Energy Index is still the capital of Brazil and Australia. For example, Valepar, Brazil's state-owned capital, controls Valepar in Brazil. Among its top 65,438+00 shareholders, three shareholders hold shares in McGraw-Hill: American Pioneer Group, State Street Company and BlackRock Institutional Trust Company.
We have been working hard on the pricing power of iron ore, but we can't get rid of our dependence on imports in the short term, so it is helpless to buy ore at a high price.