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

Xiaochun Huang and Akira Tanaka

Discussion papers from Graduate School of Economics , Kyoto University

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.

Keywords: Long-term contract; spot trading; iron ore price index; the Big Three; China Iron and Steel Association(CISA); dispersed industrial organization; state intervention (search for similar items in EconPapers)
Date: 2017-08
New Economics Papers: this item is included in nep-cna, nep-com, nep-ind, nep-sea and nep-tra
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