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Industrial Organization of China’s Steel Industry and the Restructuring of the Asia-Pacific Iron Ore Market

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  • Xiaochun Huang
  • Akira Tanaka

Abstract

The iron ore trading system underwent a transformation in 2010. Until then,long-term contracts dominated the trade and the FOB price was determinedthroughnegotiationsbetween supplierand buyer, with the agreed price applied the following year. This system was changed in 2010 to aquarterly index-linked pricingin which the CFR price was applied. Some studies have suggested that the intervention of the Chinese government was the reason for this change, but this study concludesthat it was thebargaining betweensuppliersand purchasers thatresulted in this transformation.

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  • Xiaochun Huang & Akira Tanaka, 2017. "Industrial Organization of China’s Steel Industry and the Restructuring of the Asia-Pacific Iron Ore Market," Discussion papers e-17-006, Graduate School of Economics , Kyoto University.
    • Handle: RePEc:kue:epaper:e-17-006
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    References listed on IDEAS

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    1. Sukagawa, Paul, 2010. "Is iron ore priced as a commodity? Past and current practice," Resources Policy, Elsevier, vol. 35(1), pages 54-63, March.
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    More about this item

    Keywords

    Long-term contract; spot trading; iron ore price index; the Big Three; China Iron and Steel Association(CISA); dispersed industrial organization; state intervention;
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