After listening to You Sihai's story, Yang Xing felt that he could hear his implicit voice, "According to your opinion, although vigorously developing smelting equipment based on the domestic iron ore is an increase in the smelting process, which is a thankless practice, in order not to be controlled by others, we should persist, so you have such great confidence in me?"

You Sihai accepted Yang Xing's invitation this time, but actually shouldered a special mission, which was to represent the newly appointed State Councilor in charge of national industrial production to inspect the strength of Zhongxing Group. He undoubtedly saw the future of China's manufacturing industry from Zhongxing Group. Before coming, he had accepted Rong Mingyou's suggestion and secretly visited several major star cities of Zhongxing Group, and paid close attention to many products at the recent Zhongxing World Conference.

It's funny that he thought he had been staying in a large state-owned steel mill for the rest of his life and was a prestigious figure in the steel industry. However, after comparison, he was a little discouraged and concluded that compared with many domestic national machinery manufacturers, Zhongxing Group's vision and strength are undoubtedly much longer. From the progress of various products at each conference, it can be seen that their pursuit of excellence and unremitting innovation in manufacturing technology, and allowing domestic steel mills to get rid of their hopes for Japanese steelmaking technology, they are entrusted to Zhongxing.

Since mankind entered the era of large-scale industrialization, coal and oil responsible for providing power, as well as steel and plastics that provide basic raw materials for industrial production have become the main criteria for measuring a strong country. If oil is the blood of industry, then steel is the skeleton of industry. Before World War II, predicting a country's war potential, as long as the country's oil reserves and steel output can be judged, it is impossible to tell the difference. Even after entering the information age, silicon wafers are more important than steel. But as a big country, the annual amount of steel is still one of the important military and national strength indicators.

As a strategic resource, the New China, which was once humiliated by foreign steel arms, has a desire for it that outsiders cannot understand. The "Great Steel Making" movement after the founding of the People's Republic of China still remembers it freshly. China's position of world-class steel production, which has been pursued by previous national leaders, was finally realized in 2000, and the outside world also regards it as a symbol of China's becoming a world power.

In recent years, the development of domestic industrialization and urbanization has accelerated, and the demand for steel has become more urgent. Large steel mills with domestic output of tens of millions of tons have sprung up like mushrooms after a rain. Baosteel and Shougang, which are among the top, are even preparing to challenge the new goal of annual output of 100 million tons. The world's largest steel mill will appear in China sooner or later, which is no longer a suspense consensus in the international steel industry.

However, a big steel country does not mean a strong steel country. In terms of high-value-added steel products such as aviation, automobiles, and packaging, the country has always had a gap with the world's advanced level. Many steel mills are now pursuing mass production of cheap and low-end steel instead of hard work to develop more advanced high-quality steel.

Yang Xing has a deep understanding of this. He has a Swiss army knife at home, which was a souvenir brought back when his father was working at Huaxia Construction Group in the 1980s. After using it for more than ten years, his stainless steel blade body is still evident and can break hair. Looking at the same stainless steel knives in China, there are almost no one who can do this in terms of durability and steel treatment.

It can be seen that domestic steel mills pursue steel production in a single way but do not improve their ability in steel smelting and processing. However, through long-term observation of Zhongxing, You Sihai saw the essence of Zhongxing Group's manufacturing strength through the appearance of various products. Just like companies such as Xingchen Manufacturing and Xingwei Resources exhibited various mechanical equipment at the World Congress, perhaps it is not as diverse as digital products, and laymen can't even understand it very much, but insiders are deeply shocked when they see it.

Two days ago, You Sihai, as an ordinary audience, watched the construction site of Zhongxing Yangpu and Boao Port and the factory production line in Hainan Xingcheng, and was amazed. The large-scale construction machinery and engineering ships that were dredging and undersea operations at the two ports surprised You Sihai. In the past, these equipment almost relied on imports from major industrial countries such as the United States, Germany and Japan. But now these machinery are eye-catchingly printed with the logo of "Zhongxing Group".

Xingtian Power's almost completely automated automobile production line made him feel that Zhongxing's determination to catch up with the most advanced international standards in the fields of digital machine tools and industrial robots. Therefore, he sincerely hopes that Zhongxing Group will show its strength to produce smelting equipment for domestic poor ore iron ore, breaking the Japanese's technological monopoly on domestic enterprises in steel smelting. It no longer relies entirely on imported iron ore.

"Yes, I have been in the steel industry for a lifetime and have special feelings for this industry, but I am very optimistic about its prospects. Now, domestic construction, automobile and other industries have a great appetite for upstream steel. Many people think this is a good opportunity to make money, and they are rushing to blast furnaces. Private steel plants in Jiangsu and Zhejiang are even more said to be put into production and made profits in that year. But I think this is a drinking poison to quench thirst, because most of them still use low-level and high-pollution elimination technology, and repeated construction is wasted resources."

"If steel mills want to make profits, expand production capacity to reduce costs, it is only one aspect. The key is to rely on technology and control of upstream resources. I have seen imported German knives in Xingfu Department Store's shopping mall. A knife can sell for tens of thousands of yuan. In addition to the reputation of manufacturing in Germany, people's technology in steel smelting is the selling point. They only want to make money easily by importing iron ore, but not based on domestic reality to improve manufacturing technology. This uninspiring business idea will sooner or later make domestic steel mills~--update the first release~~a big loss!"

Wenyu frowned when he heard this. He knew very well that steel is a national strategic resource and it sounded so dangerous. "But as far as I know, Baosteel will represent domestic steel companies to participate in global iron ore negotiations next year. Doesn't this mean that China has made substantial progress in participating in global commodity pricing? As the largest producer of steel, we can finally grasp the initiative in pricing imported iron ore?"

Yang Xing laughed and said, "That's an official article. There is indeed progress. In the past, he slaughtered pigs and did not discuss them with pigs. Now he is asking the pigs, how big do you want to cut?" You Sihai, who knows the inside story, had to shake his head and explain that the global iron ore price was determined based on the contract price agreed by the three major international iron ore producers and major steel producers. This pricing system has been operating in 1981 and has a history of 28 years.

According to customary practice, starting from the fourth quarter of each year, the world's mainstream iron ore suppliers will negotiate with their main customers to decide the iron ore price in the next fiscal year. If any mine reaches an iron ore sales contract with a steel mill, the other negotiations will accept this result. The negotiations were originally divided into Asian markets and European markets, and the prices of the European markets are mostly based on the prices.

However, with the rise of the Asian economy, Asian steel mills represented by Nippon Steel have gained greater voice, and the negotiation mechanism has also changed. As the world's largest importer of iron ore, China will become the world's largest iron ore importer, Baosteel will begin to participate in Asian iron ore price negotiations as a representative of China's steel industry from next year. The negotiation pattern will be three to three, that is, suppliers from Australia's BHP Billiton, Rio Tinto and Brazil's Tamsui River, against Baosteel, Nippon Steel and European steel mills, and the suppliers and the demanders will negotiate in the form of cross-counterattack.

You Sihai is not optimistic about the prospects of domestic steel companies facing the three iron ore giants. First, the current situation of China's large and scattered steel industry has weakened the negotiation strength of China's steel mills. Although China's imported iron ore accounts for nearly half of the world's iron ore sea transportation trade, the scattered and disordered steel industry is also unique to the world. These imported ore indicators are scattered into the hands of hundreds of steel mills, which is far from meeting the needs. The result is fierce internal fighting and the chaotic market order can easily defeat each other by negotiating opponents.

Previously, the China Iron and Steel Association repeatedly asked steel mills to be self-disciplined and fought together, not only to negotiate with the three major iron ore producers alone. However, a few steel mills secretly signed spot procurement contracts with iron ore producers every year, which greatly encouraged iron ore producers' determination to raise prices. From 1998 to now, the three major iron ore producers have doubled their prices, seriously weakening China's negotiation status.

Second, the current iron ore price negotiation mechanism is unreasonable, and Chinese steel mills are in a natural passive position. Japan, European steel mills have long-term investment cooperation relationships with iron ore manufacturers. Most of the price increases are exchanged for the right hand, and the investment returns brought by them can partially offset the increase in iron ore procurement costs. In Japan, European steel mills' products are mostly high-end steel, with high added value in products and strong ability to withstand iron ore price increases, but most Chinese steel mills do not meet these conditions.

China has not reached an offensive and defensive alliance with steel companies in other countries. In one-on-one negotiations, iron ore producers will always consider bypassing China. With Japan, where the negotiation resistance is small, European steel mills will first reach an agreement. The price reached is often higher than China's bottom line, forcing China to accept it.

"I have worked in Baosteel. Baosteel fully accepts the Japanese technology and equipment, and has invited Japanese investments several times to expand its production capacity. Mitsui Products is one of the largest shareholders of Baosteel. Baogang also signed a long-term shipping ore contract with it. The outside world regards Baosteel as an affiliated company of Mitsui. Mitsui is also an investor of the three giants of iron ore. The interest disputes in this matter are hard to believe that Baosteel will take full care of the interests of its peers. I am afraid that it will be a meat bun to beat a dog, and the price will definitely rise again next year. So I admire your and Mr. Rong Mingyou's vision. I bought iron ore in Australia early, and now I don't have to rely on others to build my own steel mill."

Yang Xing replied with a smile, "You Laoyan is so serious. You look down on us so much. I want to give you face. I will discuss with my subordinates. It is indeed unreasonable to keep your own ore. If you always import it, you can use your brain on smelting equipment. In addition, I have a few ideas about this iron ore negotiation. I would like to ask you to consider it."
Chapter completed!