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Address Choking Points Blocking Ironstone Supply Chain Pricing (No.279, 2021)
2021-11-17
By Zhou Jianqi & Yuan Dongming, Research Institute of Enterprises, DRC
Research Report, No.279, 2021 (Total 6344) 2021-9-22
Abstract: This round of ironstone price hike has lasted for a year, hitting a new high. With unexpected increased scale and speed, it has exerted detrimental impacts to China’s economy. This round of global ironstone price spike further exposed China’s choking points in ironstone supply chain pricing. Specifically, as China is highly dependent on imports of ironstone, its voices on ironstone supply chain pricing in the world are relatively weak. Besides, the domestic future delivery mechanism is inadequate and a fully-leveraged price stabilizing mechanism through inventory is not brought into play. In face of the bottleneck issues relating to China’s ironstone resources, we need to enhance discretionary support ability for resources, form a market-based mechanism that can effectively stabilize short-term price fluctuations and accelerate the building up its pricing capability. This paper notes that we need to improve controllable ironstone capacity and domestic waste steel recycling efficiency, intensify supervision to and cooperation with overseas pricing agencies, enable the ironstone futures market to become more integrated with global market on the basis of refining institutional arrangements and establish a national ironstone digital inventory platform by way of industrial Internet.
Keywords: ironstone, pricing weakness, price stabilization, policy options
