China's steel industry has to pay for ever-higher iron ore prices

Rio Tinto's "Spy door" point of time is not sensitive. As the world's largest iron ore consumer, China insists on the "first price" after the emergence of a lower decline, but July 1 China and the big Three long association negotiations are over, the two sides remain deadlocked, Rio Tinto China, the chief representative of the four key employees were suddenly detained by the Public Security Department.　　Mr Hu is the main negotiator for Rio Tinto. The failure of the iron ore negotiations for six consecutive years has left the entire industry on the verge of unbearable pain. The rapid growth of iron ore demand for many years at the same time, under the "unspoken rules" of the role of the three major iron ore giants and the Chinese signed the long ore prices also rise, the Chinese steel industry has to pay for the rising iron ore prices.　　According to industry experts preliminary estimates, since 2003, the Chinese steel companies in 6 years only because of the price increase of more than about more than 700 billion yuan, equivalent to the same period of Chinese steel enterprises profits combined twice times more. And who's going to pay for this unspoken rule? A week ago, a bribery scandal in Siemens to the World Bank to pay a settlement agreement, in order to quell the "bribery door", the company has paid a number of countries billions of of dollars in fines, the same business scandals in Rio Tinto, what will be punished?　　Netizens ' accusations, media questioning, the multinational's reputation has fallen to freezing point in China. The expensive "unspoken rules" are different from the damage to Chinese business from the commercial grey curtains of other multinationals, iron ore lost for years, the price jumped six year, the cumulative rise of up to 400%, China's steel companies have always been others, especially by the iron ore suppliers led by the nose is the result of repeated innovation high industry-wide losses.　　At the end of last year's new state-run press conference, the Minister of the Treasury, Li Yizhong, was bitterly "unable to eat a second loss". A few days ago, with media tracking reports, the "unspoken rules" of iron ore negotiations were gradually exposed to the people. "Why iron ore price negotiations are significant, for example, even if the iron ore negotiations down a dollar, Chinese steel mills will be able to reduce the import cost of 500 million of dollars", a medium-sized private steel companies in Shanxi told reporters that iron ore negotiations "unspoken rules" of the essence, is "the interests of individual enterprises, corporate interests personalized", Because the previous years iron ore negotiations of the Chinese representatives to the price of how much is not particularly concerned about the price (and can be passed on high prices), more concerned about whether their companies can get more quotas (long ore prices than spot prices much lower) to resell, or even exclude individuals from profiting.　　So in the negotiation of each other's public relations offensive, price negotiations repeatedly lost. The consequence is that China's entire steel industry has paid dearly for the "unspoken rules". How much is the price? Dongdengwen, director of the Institute of Finance and Securities, Wuhan University of Science and Technology, has counted a bill, and since 2003, China's demand for iron ore has increased sharply due to the rapid expansion of the auto industry and the real estate industry. The world's iron ore suppliers use China's huge demand for iron ore, successive years of substantial price increases, and constantly profiteering. Statistical data show that 2005The price of iron ore is 71%, 2006 is 19%, 2007 is 9.5%, 2008 is up to 96%.　　Dongdengwen pointed out that 2003-2008 years of iron ore prices up to 4.6 times times, on the basis of calculation, the 6-year Chinese steel companies only because of the price increase of more than about more than 700 billion yuan, equivalent to the same period of Chinese iron and steel enterprises total profit of more than twice times. Chu Zhihua, a prominent commentator, points out that no matter how commercial bribery operates, one thing is certain: the wool is not in the sheep of Australia, but in every Chinese.　　The cost of commercial bribery assessed the price of iron ore, resulting in the rise in steel prices, but also led to railways, highways, automobiles, real estate, household appliances and other steel-related industries face the situation of increased costs, and eventually passed on to consumers. And who's going to pay for this unspoken rule?　　A week ago, a bribery scandal in Siemens to the World Bank to pay a settlement agreement, to quell the "bribery door", the company has paid a lot of countries to pay a fine of billions of U.S. dollars, the same business scandals in Rio Tinto, will face similar punishment? "At present, the case has not been a large amount of public, but if the qualitative, we can not only legal recourse, but also from the corporate social responsibility moral ethics to torture multinational companies." Vice Dean of Guangdong Provincial Academy of Social Sciences Long-term research on corporate social responsibility of multinational corporations Youhuan from the scholar's point of view, we can properly publish the case, "now the international Corporate social responsibility movement development of great influence, we now better strategy is to publish the case, the case, the international community to help us torture." It is reported that commercial bribery is a widespread crime in the world, and our country acceded to the United Nations Convention against Corruption in October 2005.　　In the past, we did not publish the case, and I believe that in the context of globalization, our government departments should also adjust their ways of doing things. Rio Tinto Zeize "Rio Tinto ' sharpening, step-by-step" in the past six months, the two sides have no room for mediation, the Chinese steel industry has been forced to the brink, only to detonate the Rio Tinto's ' spy door ' incident. "The head of a domestic steel enterprise laments. "The Australian company is too strong and Zeize has led to today's results." "In early June, at the end of the iron ore negotiations, domestic scalping speculation was simmering." Rio Tinto split the cards, avoiding CISA, and secretly agreed with small steel companies in the mainland, at that time, the "collective defection" of small and medium-sized steel Enterprises became the headlines of the media, CISA Secretary-General Shan to this newspaper repeatedly stressed, "small and medium-sized Steel Enterprises, signed is also a white sign, not a long association effect, not reported," but because of low industrial concentration,　　The negotiations can not form cohesion, so a large number of iron ore to the Chinese port hoarding, creating an illusion of demand, forcing CISA to submit to the negotiations.　　CISA helpless, had to turn to the State administration, but also appealed to this newspaper, "approval department should immediately cancel the Rizhao International iron ore Trading Center recognition", when the final negotiations "time window" only 15 days. This is not enough to leadWhen the two sides turned against each other, the other side, when CISA expressed their willingness to compromise, still step by step press, according to people familiar with the situation, CISA at the final pass, has been as long as the other side on the basis of the 33% loose, CISA will not adhere to the 40% bottom line, "CISA struggled to negotiate for several months, It has to be given to the Ministry of Industry Leadership and steel. "But Rio does not leave any room for even a symbolic compromise. That's because Rio has the cards to negotiate. China does not know the bottom line of the negotiations in Australia, but in the negotiations, faced with more than 50% of the world's largest steel production and consumer countries, China's bottom line each other know, including the Iron and steel Industry Association members of the plant ore stock enough for a few months, is the number of transport road, Wharf Inventory, monthly production orders,　　Replace supplier availability and even internal meeting minutes. Negotiation pattern or break but union metal net iron ore channel director Umetal that "demand" is the other side let the Chinese "submit" to the cards. "If iron ore is a product that China does not need, it may not need to be negotiated at all." If you have a demand, it has a reason to rise; if there is no demand, like this year's financial crisis, they have to cut prices. "So the other way out is the" throttling "——— limit capacity, during the iron ore negotiations, an important trend has aroused the concern of the industry, the last half month, Premier Wen Jiabao concentrated in Hebei Tangshan, Shandong Jigang, Shanxi Taiyuan Iron and Steel Company investigation. In the research, Wen Jiabao repeatedly stressed that the current China's steel industry overcapacity, must be determined to increase the intensity of structural adjustment, strengthen technological transformation, resolutely compressed backward production capacity, in the reform to promote the merger and reorganization of enterprises, early adjustment, early initiative. It is clear that the status of the steel industry has aroused the central concern, and iron ore negotiations is a very important part of the steel industry.　　This reporter interviewed by the high level of Shanxi steel Enterprises, Wen Jiabao's three visits to steel enterprises, no doubt released such a signal to the outside world: on the one hand, the steel industry integration must be accelerated; On the other hand, large steel companies defend national interests in iron ore negotiations. A few days ago, the negotiations between Sinosteel and the international giants were only deadlocked, and the date of the showdown was postponed. "Now the uncertainty is very strong, it is not necessarily a year, may be changed into six months to talk about." Ping An securities and steel industry senior researcher Nie Shouxin that the "spy door" incident in the short term impact is not, "in the long run, the original negotiation competition pattern will be broken." "Newspaper reporter Gao Lingyun intern lu