In this world, there is no absolute buyer's market or seller's market. A balance must eventually be reached between buyers and sellers, and no party can maintain an absolute advantage.
Take the oil market for example:
It is no exaggeration to say that oil is the blood of modern industry. A country like the United States consumes more than 600 million tons of oil a year. If the oil supply is interrupted, the entire American society will come to a standstill.
However, does this mean that the Middle East oil tyrants can increase oil prices without limit?
This is not the case. Instead of raising oil prices endlessly, the Organization of the Petroleum Exporting Countries will even take the initiative to increase production and suppress oil prices in some cases to prevent oil prices from rising to a level that is unfavorable to oil-exporting countries.
On the surface, if oil prices rise, the income of oil-exporting countries will of course increase. However, if oil prices rise to a certain level, consumers will consider other alternatives, such as using coal chemical industry to produce artificial oil.
A very promising approach.
OPEC has conducted special research and found that when the price of oil is higher than a certain level, it is profitable to carry out coal chemical industry to produce oil. At this time, countries will generally adopt coal liquefaction technology to reduce their dependence on oil. In order to curb coal liquefaction
In terms of technology research and promotion, OPEC must control oil prices within a certain level to protect the long-term interests of oil-exporting countries.
Qin Hai's attack on Vale is also based on this principle. When the price of iron ore is low, it is uneconomical to develop Russian iron ore and replace steel with plastic, and no one will be willing to invest in it.
But when the price of iron ore continues to rise and the price of steel exceeds a certain limit, it becomes feasible to replace steel with plastic. At this time, a large number of institutions will invest human and financial resources in research and development, and there will also be a large number of manufacturers.
Willing to build new factories to produce corresponding plastics.
Vale certainly understands this truth. When they raise the price of iron ore, they also use the price of plastics as a frame of reference to avoid making the price of steel higher than the price of plastic.
However, they missed the variable of Qin Hai. In order to compete with Vale, Qin Hai did not hesitate to invest additional funds in the mining of subway ores in Russia and other countries, as well as the research and development of plastic steel and other materials. According to the current iron ore price and
Calculating the cost of plastic production, it is still uneconomical to replace steel with plastic. But if Qin Hai is willing to lose money to promote this kind of thing, then Vale will have no way out. The huge cost pressure will plunge Vale into the abyss.
After considering this result, Qin Hai certainly had enough confidence to negotiate the price with Callum. He directly rejected Callum's offer and put forward such a harsh requirement that the price should not be increased within this year.
"This is completely impossible!" Jofts' first reaction was to jump up and protest. A 20% price increase is already Vale's true bottom price. If not even a penny is raised, Vale may even fall into a loss.
.
"Mr. Qin, you should know that maintaining last year's price is an unreasonable request and we will never agree to it," Callum said seriously.
Qin Haidao: "Mr. Callum, Mr. Chofts, you should also know that if you had agreed to only increase the price by 20% during the first negotiation, then everything that has happened so far would not have happened.
Yes, we will happily accept this price and maintain good cooperation with your company."
"But is there any difference between now and then?" Jofts asked.
"Of course." Qin Hai said, "Do you know how much money we have paid for the Dubiago iron ore, Simandou iron ore, etc.? Also, we have researched and developed super fiberglass and many products that use plastic instead of steel.
How much money has been invested? All of this is caused by Vale's substantial price increase. Shouldn't these additional expenditures be borne by Vale?"
"..." Jofts suddenly became speechless. He wanted to say Brazil's national curse to Qin Hai, but when the words came to his lips, he couldn't say them out no matter what.
The cost of developing the Dubiago iron ore and the Simandou iron ore is indeed very considerable. But why should Vale reimburse the money? What about the research and development of super fiberglass? Is there no iron ore negotiation?
Don’t you want to develop this kind of technology? If you count such expenses on Vale, do you still dare to be more shameless?
However, how could Joefts say such a thing? Now that everyone is a slave and I am a fish, how can he dare to anger Qin Hai easily?
"Mr. Qin's condition exceeds our company's bottom line. I can't agree to it right away." Callum spoke. At that moment, he recalled the entire incident, and his understanding of Qin Hai deepened.
First level. He realized that Qin Hai is a person who is determined and will never suffer losses. As he said himself, he must invest in Dubiago Iron Mine, Simandou Iron Mine and other places.
Earn it back, otherwise it means you have suffered a loss in this iron ore negotiation.
Callum believes that if he does not agree to Qin Hai's request, Qin Hai may take some more crazy actions, and when Vale wants to make peace in the future, Qin Hai will still spend these subsequent expenditures generously.
When it comes to Vale, the conditions offered at that time were not to maintain the original price, but maybe to reduce it by another 10 percentage points based on the original price.
The fight can no longer go on, this is what Callum feels in his heart. According to Qin Hai's method of settling accounts, the costs incurred during the friction between the two sides will eventually be counted on Vale. Who dares to fight this kind of battle?
"Mr. Qin, you might as well suspend the development of iron mines such as Dubiago. We can restart negotiations and reach a price that is satisfactory to both parties as soon as possible. What do you think?" Callum suggested.
Qin Haidao: "Mr. Callum, to tell you the truth, our country's steel companies now have no iron ore available. How will their iron ore supply be solved during the negotiation period?"
"We can agree on a temporary price and solve some of the iron ore trading issues first." Callum said while holding back his embarrassment. He didn't believe that the Chinese company no longer had iron ore. This was clearly Qin Hai's attempt to force him out of the palace in disguise.
, but he had no good way to crack it.
"How to determine the temporary price?" Qin Hai took advantage of the victory and asked.
"Just an increase compared to last year..." Callum said.
"I think we should maintain last year's price." Qin Hai said domineeringly without letting Callum finish.
"Okay... but the total amount can only be limited to 10 million tons..." Callum said, almost wanting to vomit blood.
"Haha, Mr. Callum is really a good friend of our Chinese people. This is really urgent for us." Qin Hai nodded with satisfaction.
"This is what we should do..." Callum said helplessly. Then, with a flash of his eyes, he asked meaningfully: "So, what are Mr. Qin's considerations about this forum?"
Qin Hai pretended to think and said: "Well, I just thought about it. The full implementation of replacing steel with plastic will also have a negative impact on us. Therefore, I think that although we can transfer the corresponding technology to other manufacturers,
But in terms of output, there should still be some restrictions. Xia Gong, please adjust the details of the technology transfer and require the transferee to only produce according to the output specified in the agreement, and the excess will be charged a licensing fee at a higher price."
"I think this is a better technology transfer model." Callum complimented appropriately, and at the same time, a stone fell to the ground in his heart.
If it weren't for the purpose of forcing Vale to make concessions, how could Qin Hai be willing to transfer the production technology of plastic steel and fiberglass at such a low price, which is only equivalent to 20% of the normal licensing fee, and it is difficult to recover even the research and development costs. Now that Callum is already low
Of course, Qin Hai must quickly reduce his losses. He cannot go back on what he has promised on the forum, but he only said authorization, but did not say the authorized quota. For example, I ask that your annual output cannot exceed 2,000 tons. This
Isn’t it too much to ask? If you are optimistic about the market and want to produce more products, then add 100% of the licensing fee.
Callum and his party left China in a depressed mood, and the negotiating team sent by China quickly rushed to Brazil again to start the second round of iron ore negotiations with Vale. This time, Qin Hai did not go there in person, but he knew
, there is a Sword of Damocles hanging over Callum's head, it is impossible for him to show any arrogance.
The negotiations progressed smoothly. After several rounds of consultations, Vale finally determined this year's supply price to China with an 8.7% price increase over last year. The two sides also agreed that next year's iron ore price would be the highest based on this year's price.
The price is not allowed to increase by 10%. The specific price will be determined later by the international economic situation. After the negotiations between Vale and China were completed, BHP Billiton also adjusted this year's iron ore price, only making a small increase based on last year's price.
Improvement is also within the acceptable range of China.
Just when the good news came from the iron ore negotiations, Pang Yongfu sadly left his office and handed over his authority as the general manager of Hongyuan Iron and Steel Company. At this time, according to the new organizational structure plan, the Economic and Trade Committee had been merged into the Commerce Committee
The Ministry of Finance, and its power to manage enterprises was assigned to the newly established State-owned Assets Supervision and Administration Commission. When inspecting the State-owned Assets Supervision and Administration Commission, the head of the central government delivered an important speech, specifically mentioning that state-owned enterprises should assume social responsibilities, and directly named Hongyuan Steel Company, saying that
It performed poorly during the iron ore negotiations and lost the overall perspective that a state-owned enterprise should have.
There are very few companies that can be directly named and criticized by the chief. This speech by the chief decided Pang Yongfu's fate. The Hongyuan Provincial Party Committee and the Provincial Government made a decision on the same day to revoke Pang Yongfu's position and find him a person of the same level.
I went to the unpopular unit for retirement.
In the entire steel system, no one cares about Pang Yongfu's resignation. Everyone is busy expanding production scale to welcome a new round of blowout in infrastructure construction. (~^~)