Research On The Influence Of Iron Ore Import Price Fluctuation On Domestic Steel Price

Early 21 st century,China’s steel industry to promote the shift to a new round of the world steel industry,when the rising star of China as a big country economy,its powerful endogenous demand become the rise of China’s steel industry worldwide industrial relocation and push the most basic and the most important factor,so far our country iron and steel industry development entered a fast lane.Although China has become the world’s largest steel production country,but the steel industry serious supply exceeds demand,the market price swings,the enterprise loss problems especially in the very long period of time.Retroactively from the cost side,mainly because the main raw material of smelting iron and steel-iron ore barren and high cost has always been a constraint on the development of China’s steel industry "short board".Restricted by natural conditions and smelting technology,China’s iron ore production is abundant,but mostly poor ore,grade is insufficient,resulting in the late sorting,smelting cost is high,so must rely on imports of high-quality iron ore to meet the growing demand for steel.Since 2003,China has become the world’s largest iron ore importer.At the same time,China’s iron ore import dependence has been increasing year by year.The development of China’s steel industry has become heavily dependent on imported iron ore,and its right to speak on steel prices has been weakened.The research shows that the fluctuation of iron ore import price directly or indirectly affects the development of iron and steel enterprises,and has a certain degree of influence on the output of iron and steel,the price of iron and steel,production cost and industry profit.This paper aims to judge the impact of iron ore import price fluctuations on China’s steel prices through regression analysis and other econometric theories and Eviews9.0 econometric software.Econometric model analysis method combines theory with observational facts,endowing theory with practical economic significance,and the conclusions thus obtained are probabilistic.Under certain assumptions,this paper selects five explanatory variables that mainly affect the price of steel in China,and establishes a regression analysis model together with the explained variables to analyze their rationality and the causal relationship between each explained variable and the explained variable.The results of empirical analysis show that under the long-term equilibrium and combined action of all explanatory variables,the iron ore import price is closely related to the domestic steel price,and it has a negative correlation with the domestic steel price within three months(short-term),and then becomes a positive correlation.In the long run,the conclusion is the same as the theoretical research,that is,the import price of iron ore and domestic steel prices show a long-term positive correlation.Finally,some Suggestions are put forward,that is,by stabilizing the price of iron ore import,the price of steel in China can be further stabilized.