Game Analysis in Negotiation of Iron Ore Price

Jian Li (), Jia Chen () and Shouyang Wang ()
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Jian Li: Beijing University of Chemical Technology (BUCT)
Jia Chen: Bank of China
Shouyang Wang: Chinese Academy of Sciences

Chapter Chapter 7 in Risk Management of Supply and Cash Flows in Supply Chains, 2011, pp 161-185 from Springer

Abstract: Abstract The international iron ore market determines prices through yearly negotiations, using certain long-term trade agreements as its main price-setting mechanism. According to convention, the new fiscal year’s iron ore prices are decided before April of every year. During the process, the largest iron and steel enterprises, acting as industry representatives, negotiate with iron ore suppliers to form the basic prices for European and Asian importers. Australia’s BHP Billiton Ltd, Rio Tinto Group, and Brazil’s Companhia Vale do Rio Doce are the three major suppliers of iron ore across the world. While for a long time, Japan sets the standard for Asia.

Keywords: Wholesale Price; Optimal Price; Nash Bargaining Solution; Revenue Function; Investment Ratio (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1007/978-1-4614-0511-5_7

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