CCTV questioned the competence of cost negotiation

August 4, CCTV
CISA denies suspension of negotiations on short-term experts say there will be no bargaining agreements
CCTV
reselling iron ore steel prices, Steel Association made it clear that to
Australia iron ore negotiations stalled, low-key reaction to Brazil's CVRD, heven now to result in iron ore negotiations, and afterward whether the success or failure?
government-led negotiations, business negotiations on behalf of, the Association is now authorized to negotiate, negotiation by with how the protagonist's change of paradigm shift? To commute for long-term interests of hereafter negotiations, what should we better with international criteria?
host (Dong Qian):
Welcome to
We know thatChina is the world's largest buyer of iron ore, but this position did not purchase the course of the negotiations reflected. Involved in the negotiations from 2003 to the present, we have been in a passive acceptance of the situation. Has now entered into the August, 2009 has already more than half, but we still
and CVRD for difficult negotiations. How do we in the future negotiations to have more right to speak? Today, our studio specially invited experts in this field,Supra TK Society Shoes, Beijing University of Technology Professor Xu Zhongbo. First Hsu, you give us to answer a question,Supra Indy NS Shoes, more than half a year already,Supra Skylow Shoes, we are still in this year's iron ore price negotiations, how do you think of this situation?
Xu Zhongbo (guest onlooker):
this phenomenon in the history of the world's steel is the first time, to say the past is the first time the Japanese negotiations with Australia and Brazil, is the conclusion of negotiations in late March each year. Last year, China's negotiations is the end of June to negotiate an end. Equal to three months last year, plus overtime, and finally reach an agreement. The end of June this year, China did not negotiate, the Japanese jumped out, reached an agreement, the Chinese do not accept and continue to add one month to now has not negotiated.
Moderator:
you say is still in the impatient, confusing state.
Xu Zhongbo:
couple, either requirements are incongruous.
Moderator:
First, we look into next year, the Chinese negotiation process, and Steel Association's recent position.
(Play video)
Commentary:
Chinese and foreign parties to the game by showing the situation is still not clear, and this process, China is also beneath the affect and adapt the pace. Recent media is focusing a great width of alley in a series of position Steel Association.
according to multi-party judgments, iron ore negotiations seem stalled in recent days will enter the closing stages, with a final result, at the moment in any position and Steel Association's operations are increasingly of concern.
2009 年 8 月 4, The spot price has exceeded one hundred U.S. greenbacks per ton, much higher than Japan and other countries signed a long-term agreement price. China Steel Association said this, the disorder will strike hard import traders, especially mine down illegal traders.
Commentary:
accompanied at a catena of position in the Steel Association, the pertinent statistics also confirm a fact. July 31, the third industry information Steel Association conference, China Steel Association recently unlocked statistics show that China's iron ore import eligible enterprises with a 112, the tangible import corporations of 152, indicating that Although China has rigid iron ore proxy system, there is no deputy because the merchant is not engaged in iron ore imports. But in front of big amuse, and there is no binding agent system, there are still 40 companies in the illegal import of iron ore. The first half of this year, China imported iron ore from three hundred million tons, meantime imports of traders as much as 131 million tons.
Shan Shang-Hua (China Iron and Steel Industry Association Secretary-General):
in fact demand far not so much about superfluous imports of forty million tons know next to nothing of, beyond our absences.
Commentary:
In addition, the excess of imports of iron ore, but also to a significant surge in iron ore sea freight. China Steel Association data show that last year, per ton of iron ore sea freight is also only $ 8.85, but has now shot up to 45.6 U.S. dollars, up a full five times.
Mr Shan:
steel companies to accept than the current smudge if bomb is higher prices, loss of iron and steel enterprises will be across the embark, if we accept this price, steel face, the equivalent of suicide, wastage across the embark you can buy mine it? Can you survive? So in this circumstance can not be preferred.
Commentary:
Correspondingly, in the July 23, the China Investment Forum, the Steel Association Vice President Li Xiao-Wei also said China will not accept 33 percentage of the decline, as universal seaborne iron largest ore demand side,Supra Trinity NS Shoes, the negotiations should reflect the China price.
Today, the steel under the administration of the Association in the organization of the iron ore negotiations, but the high-profile and the attitude compared to the Steel Association, China's largest iron ore supplier CVRD's attitude toward the inverse . The face of questioning by reporters, vice president of CVRD's answer still seems full diplomatic caliber.
If Zeca Carlos Martins (CVRD vice chancellor):
In my attitude, China's major iron ore suppliers in the negotiations occupies a rewarding position for the China's problems, our attitude no change, we await the results of this circular of tough negotiations, the decision only after the company's attitude.
Commentary:
on the weekend, CVRD announced the second quarter of 2009 the operation of the company. Although a substantial ebb in corporate profits, but there are an indicator of concern, it is the second-quarter iron ore to China's log reached 35.611 million tons, accounting for CVRD the second quarter of total earth iron ore 66% of sales.
before daily iron ore negotiations, along to the rules, on June 30, is yet negotiating the traditional deadline, still persist to face into the negotiations in August, the end result what will happen from now on all sides opinion seems to have been tough to make a pre-judgment.
Moderator:
Hsu, in truth, we are maximum concerned about is in agreement with CVRD steel in the end to speak into what looks favor, we look forward to such an result. But for we look in the Steel Association's outer situation, it is to crack down aboard resale costs of steel mineral this behavior, how do we see this behavior occurs at this time?
Xu Zhongbo:
I think this formulation is not science, because we in the steel industry Steel Association is elected negotiators, this time should be more communication and iron ore suppliers, because China has all been the biggest buyer, especially in Brazil, newspaper clips just said, we import two-thirds of its iron ore, and is expanding production in Brazil's CVRD, the largest buyer of it in the future or China. At this time we should do more to communicate the work and wish that they at this time to consider long-term cooperation with China, the Chinese side to accept a more reasonable price.
Moderator:
this time we still feel, as the negotiating parties, the Steel Association should all condense on negotiations with CVRD time, but this time he should be thorough, the entire iron and steel enterprises in the domestic order , how do we see Steel Association this practice?
Xu Zhongbo:
Steel Professional Association can say this approach, because the first representative of China Iron and Steel Association, steel companies on the import of iron ore, they do not have experience in international trade. Of way this is very annoying, had negotiated a very good situation, a quasi-win negotiations, deserving not negotiated, then shuffling the outcome does not know when, so find some pretext Steel Association, to find some root for why the talks fail? Say that the blow down mine, this time to crack down on reselling the behavior of iron ore, but also to find some excuse.
Moderator:
you think is an excuse.
Xu Zhongbo:
time to crack the first quarter, to prevent the import of steel traders are so beneficial to the negotiations.
Moderator:
but I think Steel Association has its own cause to do so, because we know thatour nation has iron ore import qualified enterprises, there are 112 steel companies, but is absolutely to do so, there are many, such as statistics is 152, but there are many small and medium steel companies are instantly negotiating with these iron giants. This time the purge of the domestic steel Society to first order, then work to the negotiations, in a large part not also correct?
Xu Zhongbo:
system because of China's iron ore imports, the first iron ore import qualified enterprises which have more than one third is the trade companies, trade companies importing iron ore is to be resold, so to prevent reselling, trading companies not to import licensing, it is not resold. After you let him come in to buy, they would not let him reselling, is impossible. CISA's too engaged trading enterprises, only cry a call, can not furnish to make whichever difference.
Moderator:
which we have just listened in the video Steel Association Secretary-General in an interview, we might listen to some of his earlier interview, you ambition help us examine analysis, this time he said this What does it mean, then, we take a listen.
Mr Shan:
steel companies to accept than the current spot if mine is higher prices, loss of iron and steel enterprises will be across the board, if we accept this price, steel face, the equivalent of suicide, loss across the board you can buy mine it? You can survive it? So in this case can not be accepted.
Moderator:
him the words to say, the agreement price is not higher than the spot price, and if so dry, then we lose, but now the price is already lower than the spot price of an agreement, because we In the video which said that the current spot price of a hundred U.S. dollars a ton, and why at this time, but also that it happened before?
Xu Zhongbo:
I think the Secretary-General may be reiterated in the first quarter to say, because the first quarter in the early stage of negotiations, when the domestic spot price is lower than the long-term compact price, at that time if we accept the 33% price-cutting, long-term contract price is higher than the spot price, then all loss of steel mills.
Moderator:
Why are we at this time repeat that we have in the third quarter, why in the third quarter of the first quarter, but reiterated that the case?
Xu Zhongbo:
now made the statement on the unreasonable, because now the steel making money, down 33% on long-term price than the current spot price on the market to buy has been a lot cheaper.
Moderator:
In synopsis, we have just the an hand, the analysis of CISA is to purge the domestic order, an can not adopt such a price, he does what is the purpose?
Xu Zhongbo:
so I was not sure of their purpose, because the surplus time has added three months, plus one month, this year about over, this time ought focus on speedily base a compliant co-operation provider agreement, which is the headmaster rebuttal, the main mission, this time not entire out, caught the specter, remediation traders, this is a long process, as an urgent matter, is to referee an agreement to talk about them.
Moderator:
Steel Association is now with the Brazilian iron ore giant CVRD to negotiate, negotiate what that is acceptable?
Xu Zhongbo:
as Brazil and Japanese and Europeans talk about the price 28%, if Brazil coincided to give China a few percent points of special offers, such as down 35% alternatively 33%, may CISA also the new location is befitting, for Chinese steel mills are basically rotate around afterward in June, and the first quarter of the location is entirely differ, in July, the total profits of Chinese steel mills may exceed 200 million, for the steel Factory prices are now saying relatively lofty.
Moderator:
I have a technical problem, and now to August, 2009, will soon pass, and now the price is also a long time to talk it down, from the beginning to now, we act a what price?
Xu Zhongbo:
the end of March due to the implementation of last year's antique price, 4 months after implementation is supplied first by the old price, leaving the subject of later Duotuishaobu, last year to do so last year did not negotiate the end of March, March to June, so the implementation of the old price.
Moderator:
because it is the more defer the more negative.
Xu Zhongbo:
Yes, because it now appears that China's obtaining better and better the benefits of steel, iron and steel companies increased output, increased demand for iron ore are many and powerful international special steel production ceiling the resumption of steel production vegetation gradually, so now for the CISA favorable conditions for the negotiations in a mini bit lost, so this time we do not seize the moment to talk about, may in the future very difficult.
Moderator:
Since 2003, China's agreement to the international iron ore price negotiations, and the company is led by Baosteel in talks with iron ore giants, but from the beginning of this year, the Central Steel Association, talks succeed, this change mean? Let's look.
(Play video)
Commentary:
time in the first half of 2009, the Chinese steel mills in Union negotiations on iron ore has gone through ups and downs of the negotiations process. The beginning of negotiations, China is replacing the current round of negotiations on behalf of the negotiations is undoubtedly one of the most talked about change.
March 23,Supra Footwear, the Secretary-General Shan Shang China Steel Association told the media that the Ministry of Commerce has authorized the Association agreed to mobilize negotiations with diplomatic steel, which method namely from the beginning of this year, the Steel Association The national commerce union formally replace Baosteel, China's steel ore on the multinational altitude negotiator, medium analysis, which is in a muff of the steel industry will become a negotiating thing.
involved in the negotiations since, the Steel Association has been in a difficult show his face, clear, rather the malfunction of negotiations, not compromise. This is indeed a difficult stance ahead the negotiations with the representatives - the practice of Baosteel different.
2003 years, as China became the world's largest iron ore importer, China's iron and steel at Baosteel boss as the first representative of China's accession to the international iron ore price negotiations. At this time, China's foreign negotiations for iron ore is the process, the Commerce Department to behave an overall maneuver first, then led negotiations Baosteel, then the negotiations reported to the Steel Association, China Steel Association report back to the Ministry of Commerce, the Ministry of Commerce the last report. Obviously, the Steel Association at this time to activity only a marginal role. At the time, Baosteel's rendition is not satisfactory negotiations, a long silent gesture, paired with inner steel prices in China are not unified, decentralized power, and ultimately Baosteel and other domestic small businesses by foreign companies one by one wreck, when prices rose 18.6%. However, this is just a bad start in the next five years, China's Baosteel iron ore negotiations led a five-game losing streak emerged tragic situation.
In among 2003-2008, China's steel prices for iron ore prices rose more than at fewest about 7,000 billion to buy the single, representing Chinese steel companies combined profits more than double, especially in 2007 years, the Chinese iron ore negotiations, known as a scandal in the history of metallurgy, iron ore results of the negotiations was signed up by 90%, while Japanese companies via negotiations, prices rose only by 70%, increasing oppression of the steel industry in the beginning of the bargaining power and purpose of Baosteel veiled reproof.
questions such as Baosteel large state-owned steel enterprises seems to be the iron ore Erdaofanzi, both the production of steel and iron ore traders as, reselling at high prices of iron ore to small and medium sized steel enterprises, and acquire huge profits the feud. Ministry of Commerce, who has served as an expert consultant or even esteem, regardless of other steel prices Baosteel life and death, in the negotiations did not consider the interests of other steel prices, China's iron ore negotiations, the injury became so set in China's steel enterprises nape a ponderous chain.
2008, the iron ore price negotiations reached an unprecedented 96% gain, which makes other domestic steel prices overwhelmed, the discontent of Baosteel, has reached the point where that can not be coordinated. Baosteel steel prices in most disappointed with the performance of the negotiations, must complain to the Ministry of Commerce, through consultation, the final decision decentralization Steel Association.
from Baosteel to CISA, from enterprise to industry associations, the face of the changing role of such negotiations, the industry took a different argument, some say, in fact, this is a power skirmish, it was also in Steel Association, questioned the legitimacy of the identity, CISA is not a business, can not fully know the operation of the market rules, and Steel Association member is also very small and can not represent the entire industry benefits. Ye Hao business interests, the interests of the industry value mentioning, but for the folk concerned, maybe most want to know is that the national interest at this time has been put where.
Moderator:
Baosteel previously discussed, beginning this annual to transform a CISA, you give us approximately the China Steel Industry Association, a collaboration, it is the nature of what it is in the negotiations ?
Xu Zhongbo:
because CISA is an industry organization, iron and steel enterprises dues, employ this human to do some of the mall for steel companies to communicate with administration work, equal to the steel mill is the master, Iron and Steel Institute is a governess. Now the owner said about well, so playing nanny, babysitter even more professional, so now so difficult to talk about, and experience is not representative of the relationship.
Moderator:
But as we said in the movie inside the before negotiations, Baosteel is a business, it does not represent all of China's domestic steel companies, Steel Association now talk, can he, once and for all, on behalf of so many steel companies?
Xu Zhongbo:
sounds rational, but because of Iron and Steel Institute of Management, who in the past from the government agencies out of the steel companies of the characteristic requirements of international trade practices, they are not familiar with, so they have good purposes, but needy execution. Failure of the negotiations would favor not to accept this entity, this is not professional. Because of China's steel mills need journal iron ore, iron ore and 50% of China's imported, so can not say that failure of the negotiations.
Moderator:
good, we must analyze this statement, if the negotiations fail, even fail, we can not accept such a high price, high price if you actually do not accept this, we are faced with a What kind of situation?
Xu Zhongbo:
This is in fact impossible, because the steel is not accepting attitude Steel Association, as the Japanese reached the 32 percent price decrement agreement does not encounter our requirements best, but also the price the. And we need a current steel is iron ore every daytime, so basically steel Steel Association to talk about now is your sentence, we import our iron ore, have to maintain our production.
Moderator:
Steel Association represents the business talk, the results are now business is that you talk about you, I do my business, so will our negotiating what kind of shock?
Xu Zhongbo:
surely quite negative, and its representative did no receive sufficient assist, they may likewise have several steel mills, said Baosteel Steel Association negotiations than nice.
Moderator:
you think the negotiations in the appropriate Steel Association inappropriate?
Xu Zhongbo:
I think the steel mill or a few large organizations together, and mine to talk about, which is more right. Because the Japanese Nippon Steel to talk about, like South Korea's Posco is the world's largest steel company, where he is not negotiating, because Posco that the Japanese experience than he has, so the first two decades of imported iron ore has been Pohang, he Japan has given way to talk about his tactics for the Japanese to accept, because he felt I did not disburse the Japanese to fight for my interests, I heard he does not undergo.
Moderator:
this is your outlook, do you consider of steel by a few mighty giants save into a group, extra proper to talk about, this is your point of outlook.
Next we listen to what China Foreign Trade University, Institute of World Trade Organization, the views of Professor Zhang Hanlin, manager. Professor Zhang hi.
Zhang Hanlin:
hello.
Moderator:
you think this case, such as China Steel Association in negotiations with CVRD to go from an industry and a business organization to negotiate if you think of this in the WTO framework is not appropriate?
Zhang Hanlin (Foreign Trade University, China Research Institute of the World Trade Organization):
I would like first to memorandum is, WTO on this issue and do not clearly defined, I think it can be said on behalf of China Steel Association steel company to negotiate a right, and why? The main reason is, in fact we all know thatwe are moving in the intention of socialist market economy system, to reform, or to amplify, some of the existing state-owned enterprises, private enterprises or even joint-venture steel companies in China that we have, in this case, indeed if several steel companies from a uncomplicated, even a few major steel companies together to negotiate, in fact, may not be entirely representative of China's iron and steel enterprises. And on the other hand, the twenty years of evolution in fact has been entirely demonstrated, we combined steel companies together is very difficult. In this context, we believe that only the steel industry associations to come forward to be able to represent China's iron and steel enterprises in foreign negotiations, to negotiate.
Moderator:
But Professor Zhang, just inside our studio, Hsu also mentioned a problem, he felt Steel Association in the negotiations, he is not familiar with the rules of such negotiations, he has his disabilities,Supra Muska Skytop Shoes, how do you solve this problem?
Zhang Hanlin:
You're right, in fact, we believe that China Steel Association to come forward, we are narrated to several large steel enterprise groups of narrated businesses involved, attach form a negotiating assignment, in such a direction I think that relatively speaking, to coordinate benefits on behalf of Chinese steel companies, on the additional hand have deal with the total affair, to attend the entire negotiation process, our iron and steel enterprises are characterized in my view, is relatively appropriate.
Moderator:
to your last answer, do you think we, as one of the largest iron ore buyer in the negotiations how to increase their voice?
Zhang Hanlin:
I think that in order to increase the voice is only one way that we can truly joint steel company together, and then to negotiate a unified group, the only way to change the passive situation of the current negotiations.
Moderator:
and you just respond the previous question is not contradictory? Do you think it is difficult to correlate together, and we must add the right to speak, but only together.
Zhang Hanlin:
You are right, we believe that only the steel trade association to promote its capabilities, we believe that improving industrial organizations and industry associations to be able to really feature of external coherence.
Moderator:
good, Professor Xie Xiezhang. Professor Zhang said just one, he thinks the Chinese and Steel Association to succeed, there are relatively large steel enterprises in all joint together, this is a good negotiating crew, also spoke of a right to speak how to increase the problem, how do you see The speech over the issue?
Xu Zhongbo:
I think Zhang proposition is better, but this time the Iron and Steel Association negotiations, despite the talk about the five and a half, but build up companies negotiating experience to the side to dry, because there is no interest in CISA Inside, talk hasty talk slow, he was not steel, I worry, do not iron, I product, higher iron ore prices influence my costs, so the stakeholders, Iron and Steel Institute is an middleman, you I must negotiate a honor, I have nobody to talk about is not a huge loss, diverse the steel mills so urgent sense of liability.
Moderator:
our Steel Association in negotiations with CVRD, how do we go to position it on behalf of national interests to the negotiation? It should represent the citizen interests?
Xu Zhongbo:
can not be said to represent the citizen interest, because the steel companies Steel Association on behalf of an organization, if the steel companies authorized to negotiate it, it can only represent the interests of steel companies.
Moderator:
so many steel companies, which have a diversity of levels and contradictions, such as conflicts with state-owned enterprises and personal enterprises, but also a area of contradictions and conflicts of central enterprises, when he was in negotiations with foreign countries how able to knob these contradictions, has to go appearance?
Xu Zhongbo:
as representatives of major industrial companies have large enterprises, personal enterprises, so do not like Iron and Steel Institute, I heard about a personal business landlord, I have the right to delete my Iron and Steel Institute, words Iron and Steel Association said that the performance of completely differ.
Moderator:
you want to integrate this mess, there must be such an organization, merely now they appear to not recognize such an organization.
Xu Zhongbo:
they are not necessarily the staff of the organization which is selected by the steel companies, may be retired by the past government officials, behind no suitable jobs, and went on to the league, not a true representative of the international business interests, for the escaping of the business association.
Moderator:
Finally, I would like to hear your proposals, we next have to boost their bargaining power, because if bargaining is not our own hands, then lose also many to dine, how to increase When the intensity of the negotiations?
Xu Zhongbo:
because the iron ore negotiations in this regard, we would like to learn Japanese, because in the past two decades, the world's iron ore negotiations, the right to speak for more than 15 times the Japanese master, so Japan is first agree in a modern, but also our neighbors, so we have to worship others as a preceptor, so we enhance China's international procurement, including the sales of the right to speak.