[Introduction] The case of purchasing iron ore by Chinese steel enterprises, which has been heated up by the media, has not faded out of readers' horizons.
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The case of purchasing iron ore by Chinese steel enterprises, which has been heated by the media, has not faded out of readers' field of vision. People in the industry are well aware that although an iron ore supply contract has been reached with Fortescue Metals (hereinafter referred to as FM), the impact on the formation of "China price" in the future is limited, and the follow-up negotiations with Rio Tinto, BHP Billiton and Vale international iron ore suppliers are still arduous and complicated. In the eyes of people of insight, the significance of the iron ore procurement case in 2009 no longer lies in the initial price, long-term cooperation price and spot price of iron ore procurement in that year, but has become a battle for China steel enterprises to generate "China price" as the general goal of pricing rules for their own development and the survival of suppliers. Policy makers in the industry should not only pay attention to the gains and losses of one city and one place, but also deeply reflect on the development strategy of China steel enterprises, otherwise it will go to a more difficult situation. The case is still going on, but it has given us many important revelations.
Enlightenment 1: the market regulation mechanism is not omnipotent, and the government "acts when it is time to act"
In recent years, Rio Tinto and Vale have used unfair means to raise prices. When Chinese steel enterprises strongly urged government departments to take measures, some people objected that the government should not intervene and should rely on market mechanism for self-regulation. They regard the market mechanism as omnipotent and completely divorced from the actual situation. Businessmen are profit-seeking, while enterprises pursue the maximization of interests. In the absence of legal supervision and healthy competition in the market environment, enterprises use all kinds of resources they have to control the market, form a monopoly and realize their unjust enrichment. This kind of example is not uncommon. The speculation of Wall Street bankers has become the initiator of the global financial crisis, and the iron ore procurement case is just one of them.
The iron ore resources of Ukraine and Russia rank first and second in the world, which are mainly supplied to Europe, but their exports are limited due to their own policies. China has/kloc-0.4% of the world's iron ore resources, ranking third in the world, but its low grade (average grade is only about 25%) can't meet the domestic demand, and it is the largest iron ore importer in the world, while Australia and Brazil, which rank lower, become the largest iron ore suppliers in China. The position of suppliers in the global iron ore map is first determined by grade. Therefore, Australia's Rio Tinto, BHP Billiton and Brazil's Vale, which control high-grade iron ore (with an average grade above 40%), have gained a monopoly position in the global market. Generally speaking, Brazil's Vale has the highest iron ore grade, but for the China market, Australian mines have obvious maritime advantages. Under the severe global financial crisis, the global steel market demand plummeted. In the case of oversupply (Vale and BHP Billiton reduced production by 25% respectively in 2009), the three major international miners went against the market and kept soaring iron ore prices, forcing China steel enterprises to accept the negotiated price with the highest increase of 96% in 2008. Apart from exploiting the internal loopholes of China steel enterprises, the key point is that they jointly controlled the iron ore market through oligarchs, which made China steel enterprises pay a heavy price. According to statistics, in the eight years since 2002, China has paid an extra 700 billion yuan. Under the market regulation, when the supply exceeds the demand, the price decreases, but the price of iron ore does the opposite and rises alarmingly. Is this the law of market economy? Isn't it manipulated by the black hand of oligopoly? The government of a country with a complete market economy will not ignore monopolizing the market and manipulating prices.
Enlightenment 2: China steel enterprises are in chaos, and industrial integration is imperative.
On August 1 1, 2009, the Shanghai Procuratorate made a decision to approve the arrest of four people, including Hu Shitai, an Australian Rio Tinto company suspected of "espionage", but the charges have changed dramatically since then. Whatever the outcome, Hu Shitai and others are just speculators who failed in the chaotic situation of China's steel industry. The New York Times said that these actions are only a globally recognized business strategy ... a turning point in the Rio Tinto case, which can be said to be a commercial victory. This is really a great shame for China steel enterprises. The other party caused us huge losses by improper means and only adopted the recognized "strategy".
The present situation of iron and steel enterprises in China is a hotbed of success for others. There are more than 1000 steel enterprises in China, and the production capacity of a large number of steel enterprises is less than 6.5438+0 million tons. They are scattered and small in scale, managed by the state, local governments and private enterprises. It is difficult to unify and coordinate. China Iron and Steel Enterprise Association (hereinafter referred to as China Steel Association) is only a large steel enterprise with a national name, and many small and medium-sized steel enterprises are excluded. In addition, it is difficult to balance the interests of the central and local governments, and private enterprises are not completely equal, so there are too many industry problems.
Abuse of import qualification is the direct cause of import disorder. In recent years, China Steel Association has been vigorously reducing the import qualification of iron ore. In 2005, there were more than 600 enterprises with iron ore import qualification in China, which has been reduced to 2 1 1, and the production capacity of iron and steel enterprises with import qualification is basically above 5 million tons. June 5438+October 2009 10, China steel association formally implemented the iron ore agency system, which is a reference for Japanese enterprises. In Japan, after the large steel mills are responsible for determining the long-term contract price, several large independent traders are responsible for the import, and the agency fee is 1%-3% of the import price, while the agency fee in China is 3%-5% of the import price, which leads to the overload of small and medium-sized enterprises without import qualification. China's iron ore import control is getting stricter and stricter. Therefore, iron and steel enterprises without import qualification must find qualified agents when they need to import iron ore, so they need to pay a large commission. The person in charge of a steel enterprise calculated that each ton of iron ore needs to pay an agency fee of 1-3 US dollars, and their enterprise imports iron ore of100000 tons every year, which is equivalent to paying an agency fee of1-200 million US dollars. It is not so much agency fee as profiteering. When the ore supply was tight, the price they sold us was 0.5-2 times of the original price of 65438+. The agency system formed a black hole in eat small fish, which caused a strong rebound of small and medium-sized steel enterprises.
There is still a long way to go to achieve the goal of "China price". According to international practice, after the iron ore price negotiation is started every year, steel enterprises in any country reach an agreement price with suppliers, and all steel enterprises in the world have to accept this price. In August 2009, Vale set the annual benchmark price of iron ore in Liva, Italy's largest steel company. On the basis of 2008, the price of fine ore decreased by 28.2%, and the price of pellets decreased by 48.3%, which was consistent with the previous decline determined by Vale and major steel enterprises in the world, equivalent to the price reached by Japanese and Korean steel enterprises in Asia, and compared with the initial price set earlier by Japan and Australia. Subsequently, ArcelorMittal, the world's largest steel company, also accepted this price, and the European market price was basically determined.
China Steel Association, which presided over the iron ore negotiations in China throughout the year, insisted on a decrease slightly higher than the initial price, while Rio Tinto, BHP Billiton and Vale insisted on the initial price with the attitude of "avoiding talking", and the two sides reached an impasse. Then it was reported that sinosteel had reached an agreement with FMG, Australia's third largest iron ore enterprise. On the surface, the price dropped more than the initial price of Japan and Australia, and achieved the half-year pricing and unified price for China, which was basically in line with the bottom line of China Steel Association negotiations. However, this small victory is not enough to get rid of the deadlock. FMG's iron ore production is limited, and this year's output is only 50 million tons. Even if all the iron ore is sold to China, it can only meet the110 of iron ore imported by China steel enterprises in the whole year, not to mention that FMG will not "put all your eggs in one basket". China and FMG have reached an iron ore price agreement, which is more symbolic than practical. Among them, a company in China is the major shareholder of FMG, and China's commitment to provide FMG with considerable financing has played a great role in helping it rapidly expand its production. Therefore, it is generally believed that it is unlikely that the three major miners will accept the "China price".
China iron ore procurement negotiation mode has just been adjusted, and a new mode is being explored. Prior to this, all iron ore negotiations were planned by the Ministry of Commerce, with Baosteel taking the lead, and then the situation was reported to China Steel Association, China Steel Association reported to the Ministry of Commerce, and the Ministry of Commerce reported to the Central Committee. This year, the Ministry of Commerce delegated power to China Steel Association for the first time, and Baosteel negotiated with miners on behalf of Chinese steel enterprises. We should see that the business-to-business negotiation mode is more professional, more efficient and less destructive. The more links, the more profits Hu Shitai and others will make by adopting the "strategy" recognized by the business community. Therefore, the exploration of negotiation mode is beneficial, which will be conducive to the formation of "China price" and prevent individual China steel enterprises from spoiling the negotiations with miners for their own short-term interests.
The financial crisis that broke out last year exposed the overcapacity of steel enterprises in China. The iron ore procurement case reflects the dispersion of China's steel enterprises, and it is necessary to punish steel enterprises with heavy punches, especially in mergers and acquisitions. Overcapacity also provides a good opportunity for the merger and reorganization of high-quality enterprises, and it is imperative to promote the large-scale operation of steel enterprises. Promoting the merger and reorganization of iron and steel enterprises is a very complicated problem, but it is the only way to revitalize the iron and steel industry. Financial industry, petroleum and petrochemical industry, electronic industry and military industry have all been merged and reorganized, and they have got rid of difficulties and achieved rapid development. According to officials from the Ministry of Industry and Information Technology, the regulations on the merger and reorganization of the steel industry will be officially released before the end of this year. Baosteel, Angang and WISCO will be the industry leaders to realize the reorganization and integration of the five major iron and steel groups: Aberdeen Iron and Steel Group, Yuegang Group, Guigang Group, Hebei Iron and Steel Group and Shandong Iron and Steel Group. With the recent reorganization of iron and steel enterprises in Shandong, Hebei and other provinces, the title of "the first iron and steel giant in China" has been alternating among Baosteel, Shangang and Hebei Iron and Steel Group. According to the analysis of the insiders, this reflects that the restructuring of China's iron and steel industry has started, and it has gradually entered the stage of "in full swing". Only when the scale goes up can we compete with international giants in terms of cost, quality, energy conservation and emission reduction, and have more say in ore prices. I believe that China price will be born soon, and then become a global price.
Enlightenment 3: The fundamental way to break the strange circle of iron ore procurement negotiation lies in the implementation of industrial chain security strategy.
In recent years, with the rapid economic development in China, the demand for steel and iron ore has increased rapidly. In 2008, China imported 440 million tons of iron ore. It accounts for 52% of the annual iron ore demand, of which more than 60% comes from Rio Tinto, BHP Billiton and Vale. Experts generally believe that the dependence on imported raw materials exceeds 50%, and this industry is in a state of insecurity. Any troubles in the global economy or international suppliers will endanger the survival of this industry, not to mention competition. Even if China Steel Association relies on the administrative power entrusted by the state to achieve the ideal goal of industrial merger and reorganization and strive for "China price" under the guidance of national policies, it is difficult to ensure the long-term stability and rationality of "China price" without the guarantee of long-term development strategy implementation, especially the control of resources.
Therefore, the fundamental way out for China iron and steel enterprises is to implement the safety strategy of industrial chain and logistics chain as soon as possible. That is to say, under the background of relying heavily on the supply of resources in the international market, China iron and steel enterprises have formed a super-large iron and steel group with concentrated industries and international competitiveness under the conditions of merger and reorganization, seized the rare opportunity of the rapid growth of global steel and iron ore, made full use of both domestic and foreign resources and two markets, cooperated in overseas investment, mining, building steel mills, building shipping fleets, holding shares in or holding overseas mining enterprises, and focused on investing in miners including the three major mining enterprises to compete for the right to speak by strength.
There are similar successful examples at home and abroad. China Petroleum and Natural Gas Group Corporation is a successful enterprise in implementing industrial chain security strategy among state-owned enterprises. As early as the early 1990s, PetroChina predicted that the strong domestic economic development would inevitably bring huge demand for oil and natural gas. Based on the analysis of domestic resources and production potential, it is accurately estimated that by the beginning of the 20th century, China's dependence on imported oil and gas will reach more than 50%, and actively implement overseas strategies to ensure national energy security. Starting from 1993, China invested in oil and gas fields overseas, and successfully recovered its investment around 10, which not only enabled China's oil and gas exploration, development and production technology and team to make great efforts overseas, but also created a profit return of super investment. In 2009, under the financial crisis, it won the first post-war international oil and gas contract in Iraq and signed the list of Iraq's super-large oil field-Rumaila oil field. As of this year, PetroChina has cooperated with nearly 80 overseas projects, with an annual oil and gas output of nearly 700 billion tons. In the near future, its overseas output will more than double, effectively ensuring domestic energy security, and at the same time, the efficiency and competitiveness of enterprises will be greatly improved, making it the most profitable China enterprise among the top 500 in the world and the fifth among the top ten oil companies in the world. Its successful experience lies in the early development of the upstream industrial chain of overseas oil and gas resources, and the control of resources through investment mergers and acquisitions to ensure the interests of enterprises and countries.
Japan is a country with poor mineral resources, and the steel industry is the pillar industry of the country. In solving the development of industrial chain and raw material logistics chain for steel enterprises, Japanese steel enterprises have formed the strategic layout of the international iron ore market through several comprehensive trading companies. Nippon Steel, the leader of steel enterprises, and Mitsui & Co., Ltd., which mainly invest in overseas iron ore and marine logistics chain, joined hands to form the same interest group, holding shares with each other and forming a close strategic alliance with investment. Mitsui & Co., Ltd. has shares in the three major iron ore suppliers. Among the 24 enterprises in Australia, the three major Japanese trading companies have invested in 8, holding shares 16. Mitsui & Co., Ltd. has also established an alliance with Vale to provide mining machinery and establish a logistics joint venture. At present, Mitsui's iron ore reserves have jumped to the fourth place in the world, with an annual mining right of more than 40 million tons, which is equivalent to establishing an FMG for Japan. Mitsui & Co., Ltd. and other trading companies have developed maritime logistics industry in the steel industry chain, and the advanced layout has become a scale. From 2004 to 2009, Mitsui & Co., Ltd. invested heavily in purchasing and leasing ships, and the fleet size will increase from 547 in May 2003 to 720, making it the largest shipping group in the world. Through port layout, signing long-term agreements and expanding capacity, Japanese shipping giants have gradually mastered the initiative of iron ore shipping. Although the global iron ore and sea freight prices are rising, Mitsui & Co., Ltd. benefits from Nippon Steel. When the price falls, Mitsui & Co., Ltd. gets compensation from Nippon Steel, so that Japanese steel enterprises and logistics enterprises can benefit from each other, support each other, resist the crisis, develop and achieve a win-win situation. Even if steel enterprises ensure the supply of resources in the industrial chain, Nippon Steel will gain a favorable international competitive position. Recently, the merger proposal of the two companies was opposed by the global steel enterprise conference. It can be concluded that both iron ore suppliers and buyers are aware of the importance of controlling resources, and a new game is unfolding. ...
Both the overseas development strategy of PetroChina and the strategic alliance between Nippon Steel and Mitsui & Co., Ltd. tell us that the fundamental way to solve the strange circle of iron ore procurement negotiation lies in implementing the industrial chain security strategy.