Chapter 1927 Industry Consensus Reached

Thinking of this, Yin Jun began to think about more important issues.

Should iron ore prices increase?

From a practical point of view, prices really should be increased.

In the past 10 years, the global economy has developed rapidly and various constructions have continued. However, the price of iron ore has not increased much. It has only slowly increased from 10 US dollars in 1970 to 20 US dollars per day in 1985. Ton.

Iron ore companies that missed such a golden stage have lost at least tens of billions of dollars in revenue.

This is completely inconsistent with supply and demand.

As everyone has said, various costs are actually rising. Therefore, compared with the $10 in the 1970s, the current $20 is actually nothing at all, and there is no extra profit.

It took 15 years for the price to increase by 100%. Calculating compound interest, the average is less than 4% a year.

And when doing business, it is definitely not just about raising prices and outpacing inflation.

Doing business is about making money. Why make less money when you can make more money?

The same goes for Yin Jun when doing business.

If he didn't have a more ambitious purpose, how could he sell houses at low prices, sell various products at low prices in the mainland, and give high prices to mainland suppliers?

Therefore, it is necessary to increase prices to make money. You can increase prices as much as you can. This is the essence of business.

I want to increase the price, but can I increase the price?

This question is difficult to answer.

In 2011, the price of 63% grade iron ore soared to the highest level of US$191.7 per ton, but at that time there was almost no market price.

However, generally speaking, although iron ore has experienced ups and downs from 2006 to 2011, the average price has stabilized at around US$130, which is still very stable.

Why did the price of iron ore rise so much during this period?

The reason is very simple, with the addition of the Chinese market.

In particular, the large-scale infrastructure construction operations started in 2008 have contributed to the soaring price of iron ore.

Without the huge demand in the Chinese market, the chaos and fragmentation in the Chinese market, iron ore prices would not have been able to rise so crazily.

Since the 1960s, the world's largest iron ore demand countries have been Japan and South Korea. Due to the acceleration of a large number of industrialization construction, the amount of steel used in various automobiles, infrastructure, ships, etc. has increased sharply. The demand accounts for 40% of the world's demand.

Japan and South Korea both have almost no iron ore resources, and all iron ore needs to be imported.

But the steel companies in these two countries are very united. They have united together to negotiate prices with iron ore resources as a whole. If you don't agree, you won't buy it.

It is precisely in this tough buyer's market that the price of iron ore has only been rising slowly, which is simply not comparable to the profits earned by these steel companies.

Five years ago, in 1980, Rio Tinto and BHP Billiton wanted to significantly increase the price of iron ore.

As a result, Japanese and Korean steel companies stopped buying iron ore from them and switched to other iron ore companies.

Because their demand is large and their credit is very good, there are naturally iron ore groups willing to supply them.

BHP Billiton and Rio Tinto, which lost their two major customers, lost a total of 60 million tons of iron ore orders in those two years. They were really badly beaten.

After 2002, Huaguo Iron and Steel Company, which happened to be increasing demand, did not have the same unity as Japan and South Korea. Everyone talked about their own affairs, and naturally they were defeated by each one, which finally caused the price of iron ore. skyrocketing, allowing others to make a lot of money.

But at the same time, that is, during the same period, the purchase price of iron ore in Japan and South Korea is much lower than ours.

It means that these iron ore giants sell us high prices, but it is much cheaper to sell them to others.

This really makes people feel angry and speechless.

Back to the present.

Because China's infrastructure has not officially started to take off, there is not much demand for iron ore. Moreover, there are a lot of iron ore in China, so today's iron ore pricing power is still on the buyer's side.

To be precise, it’s the case of Nippon Steel and Posco that came today.

The two of them happen to be the representatives negotiating iron ore prices on behalf of Japan and South Korea.

Moreover, both companies have their own shares in Rio Tinto and BHP Billiton.

This makes the situation very complicated.

Yin Junke remembers clearly that from the 1980s to about 2002, for more than 20 years, the average price of iron ore was US$20.

Even though there have been rises and falls along the way, generally speaking, these iron ore companies have not been very successful in raising prices.

On the other hand, the price increase they were planning this time did not actually succeed.

But, this is a previous life.

With Yin Jun in this life, things will definitely be a little different.

"The price increase is necessary." Thoughts passed by in a flash, Yin Jun raised his head, "This price has been maintained for several years. We can't watch others eat meat. We can't even take a sip of soup, right?"

"That's the truth!"

Several people were overjoyed when they heard this. They didn't expect Yin Jun to be so upright and expressed his attitude directly.

But Daejeon Zhengping and Jin Shanxin frowned a little.

"Everyone, we feel that things cannot be decided so hastily." Jin Shanxin said, "We have always signed a long-term agreement price, and the time is still far away."

"This is different, the situation is different." Caseno waved his hand, "We have been very difficult in the past two years, and the profit is very meager, which is not enough to support normal operations. I hope we can get some understanding."

"Will the spirit of the contract be destroyed just like that?" Ota Shohei stared at them and said, "Then how can we do business in the future? Can we trust you?"

The two of them were indeed a little panicked.

They didn't expect that what they were talking about was this price increase, and they had no preparation.

And compared to the negotiation 5 years ago, this time the two giants Vale and Kirin Mining have been added, and the momentum has not only increased a little!

It is no exaggeration to say that when Vale, the world's largest iron ore company, is added to the top ten of Kirin Mining, and the owner of Kirin Group, Yin Jun, is also the world's richest man and a media tycoon, the situation suddenly becomes very complicated.

Jin Shanxin was even a little dizzy. He asked Yin Jun directly: "Mr. Yin, you have always been the idol of countless people in our country and the pride of us Asians! Why did you do such a thing of tearing up the contract? This is consistent with Do you have moral integrity in your conduct?"

Yin Jun was surprised, "Mr. Jin, my mining area has not started production yet. What does your previous contract have to do with me?"

"Hahaha……"

Simone here took the lead and laughed.

Jin Shanxin couldn't wait to find a place to burrow underground.

Even Ohta Shohei wanted to stuff him underground.

Because he made such a fuss, the originally embarrassing situation for the iron ore merchants immediately subsided.

"It's okay if we don't tear up the contract. If our machines malfunction, various unexpected situations occur, and the supply is insufficient, then don't blame us." After laughing, Hagens said.

What he said was actually the same as what he said a few years ago.

But the difference is that this time he added powerful allies.

"The Brazilian government has asked us several times about the long-term sluggish energy exports. It feels that we are suspected of selling assets at a low price." Caseno said, "If it is state power that prevents the execution of the contract, it will not Is it none of our business?"

"As for the price of iron ore and the profit ratio of the steel group, I can launch a large-scale investigation on ABC TV to let the public see the gap between the two." Yin Jun continued at this time Said, "On the one hand, the steel group is making a lot of money, but on the other hand, the resource companies are working hard and facing criticism and embarrassment from all sides, but they can only survive with a small profit."

The CEOs of several iron ore groups lit up when they heard this.

Simeone immediately said without hesitation, "Rio Tinto will always support the filming of surveys of this kind with social significance! Rio Tinto will sponsor all the expenses."

To do this kind of social survey, if it reaches two or three phases, the cheapest one will cost hundreds of thousands of dollars, and the expensive one will only cost about 1 million.

This amount of money is nothing at all, but the meaning revealed is different. Those steel companies that make happy profits will definitely be scolded in the same way, and the situation of iron ore companies will also be greatly improved.

On the contrary, Daejeon Zhengping and Jin Shanxin's expressions became even more gloomy.

If this happens, steel companies will have a hard time.

In particular, they deeply understand that if the TV station wants to catch them for their mistakes, then the steel group's heavy pollution problem will be caught accurately.

With the influence of ABC News Network, one of the top three news media groups in the United States, they will definitely make them look bad on the street.

"Mr. Yin, this is unfair!" Da Tian Zhengping protested firmly, "This way you will become enemies with all our steel companies!"

"Enemies? No way!" Yin Jun shook his head and said, "I will definitely let them report fairly and openly! If I tell the truth, I will become your enemy, then I still have this responsibility."

"right!"

Hagens really admired Yin Jun at this time. No wonder this kid became the richest man in the world at such a young age. He is so smart!

"you……"

Jin Shanxin had nothing to say and could only turn into anger, "Forgive me that I can't stay here any longer. Goodbye!"

Seeing him turn and leave, Ota Shohei suddenly understood.

This is because Jin Shanxin is retreating in order to gain some time to relax and think of countermeasures.

Thinking of this, he nodded to everyone, turned around and left.

Looking at the two of them, Caseneo smiled coldly, "Are you doing this again? What a pity, if it happens a few more times, it won't work anymore!"

"This time, our confidence is firm. We must take back what we lost five years ago!" Simeone's face turned slightly ferocious as he spoke.

The tragic defeat five years ago was unforgettable for him!