An Economic Analysis On International Iron Ore Trade

The 2010 international Iron Ore trade negotiation began at the end of last year,but the international Iron Ore producers and Chinese steel corperations haven't reached any agreement on the long-term price of this year. The continual development of China economy, especially the development of the steel-related industries,which include vehicle, machine manufacturing and real estate industry and so on, have greatly contributed to the prosperation of steel industry. Iron Ore is the core producing element and its stable supply plays an important role in the development of steel industry in China. In condition of not-enough domestic supply, Chinese steel produces have to import great amouts of Iron Ore to support the large demand, though China is abundant in Iron Ore resources ditribution. According to the statistics, the Iron Ore importing amount of China has accounted more than half of the total amount of the international importing market. Under the present international situation, whether Chinese steel companys can realize their goal in the Iron Ore negotiation is very important for the development of the industry.According to the statistics, the international Iron Ore trade price have rised greatly in the recent ten years except 2009 for the influence of the international finacial crisis. The 2010 Iron Ore trade price will certainly rise in great extent, as the recovery of the world economy, especially the recovery of steel industry. Starting from an introduction of the international Iron Ore trade negotiation, this essay firstly gives an ananysis on the condition of the worldwide Iron Ore trade and the status of Chinese Iron Ore trade, and then it uses the Supply-Demand Theory to explain the long-term price change and and demonstrate the determing elements of it under the analysis of the character of the world demanding and supplying market. This paper also uses the Nashi and Lubinstein Model to analyse and make conclusion on the elements that can influence the short-term price and benefit gained by the negotiation parties. At last, under the analysis on the Chinese Iron Ore trade charater, the paper gives some suggestions on how to promote Chinese steel compamy's negotiating ability in the Iron Ore trade.In this paper, some analysis methods have been used, such as, theory reality combining analysis, positive, nornative analysis, graphy and math demonstrating analysis method. It uses the Supply-Demand theory, Nashi and Lubinstein Mdel to explain the long-term price change and and demonstrate the determing elements of its short term change and the benefits allocation between the negotiation parties. At last, the paper gives some suggestions on how to promote chinese steel compamy's negotiating ability in the Iron Ore trade.