Material Empire

In this world, there is no absolute buyer's market or seller's market. A balance must be reached between buyers and sellers, and no one side can maintain an absolute advantage.

Take the oil market as an 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 oil tyrants in the Middle East can raise oil prices without limit?

This is not the case. Instead of raising oil prices endlessly, the Organization of the Petroleum Exporting Countries has even taken the initiative to increase production at times to suppress oil prices and prevent oil prices from rising to a level that is unfavorable to oil-exporting countries.

On the surface, when oil prices rise, the income of oil exporting countries will of course also increase. However, if the oil price is high enough, consumers will consider other alternatives, such as using coal chemical industry to produce artificial oil, which is a very promising method.

OPEC has conducted special research and found that when the price of oil is higher than a certain level, it is profitable to develop 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 the research and promotion of coal liquefaction technology, OPEC must control the oil price within a certain level to protect the long-term interests of oil exporting countries.

Qin Hai's attack on Vale also stems from this principle. In the case of low iron ore prices, it is uneconomical to develop iron ore in Russia and replace steel with plastic, and no one is 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 be a large number of manufacturers. Willing to build new factories to produce corresponding plastics.

Of course, Vale also understands this truth. When they raise the price of iron ore, they also use the price of plastic as a reference system 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 ore in Russia and other countries, as well as in the research and development of plastic steel and other materials. Based on the current price of iron ore and 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, huge cost pressure Will make Vale fall into the abyss.

With such a result, Qin Hai certainly has enough confidence to negotiate a price with Callum. He directly rejected Callum's offer, throwing out such a harsh requirement that the price should not be increased within this year.

"It's completely impossible!" Jofts' first reaction was to jump up and protest. The 20% price increase is already Vale's real reserve price. If you don't raise a penny, Vale may even fall into a loss .

"Mr. Qin, you should know that maintaining last year's price is an unreasonable request, and it is impossible for us to agree to it." Callum said seriously.

Qin Haidao: "Mr. Callum, Mr. Joefts, you should also know that if you agreed to only increase the price by 20% during the first negotiation, then everything up to today will not happen. Yes, we will accept this price with great pleasure and maintain good cooperation with your company."

"But is there any difference between now and then?" Jofts asked.

"Of course there is." Qin Hai said, "Do you know how much money we have paid for the Dubiago Iron Mine, Simandou Iron Mine, etc.? Also, for the research and development of super fiberglass and many products that replace steel with plastic, we have How much money has been invested. All of this is brought about by Vale’s substantial price increase. Shouldn’t these additional expenses be borne by Vale?”

"..." Joefts became dumb all of a sudden, he really wanted to say a Brazilian national curse to Qin Hai, but he couldn't say it no matter what.

The cost of developing Dubiago Iron Mine and Simandou Iron Mine is indeed very considerable. But why should the money be reimbursed by Vale? What else is the research and development of super fiberglass? Could it be that you would not develop this technology without iron ore negotiations? Do you dare to be more shameless if you count such expenses on the head of Vale?

However, how can Qiao Fuci say such a thing? Now that people are swordsmen and I am fish, how could he dare to easily anger Qin Hai.

"Mr. Qin's condition is beyond our company's bottom line, so I can't agree to you right away." Callum opened his mouth. At that moment, he recalled the whole incident, and his understanding of Qin Hai deepened. layer. He realized that Qin Hai was a person with a firm will and would never suffer losses. As he himself said, he had to earn back his investment in Dubiago Iron Mine, Simandou Iron Mine and other places. , otherwise it means that 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 crazier actions, and when Vale wants to make peace in the future, Qin Hai will still spend these follow-up expenses generously. Calculated on the head of Vale, the condition offered at that time was not to maintain the original price, and maybe it would have to drop another 10 percentage points on the basis of the original price.

Can't fight anymore, this is Callum's inner feeling. According to Qin Hai's accounting method, the costs incurred during the friction between the two parties will eventually be charged to Vale. Who would dare to fight this kind of battle?

"Mr. Qin, why don't you suspend the development of iron ore such as Dubiago first, so that we can restart the negotiation and reach a price that both parties are satisfied with as soon as possible, what do you think?" Callum suggested.

Qin Haidao: "Mr. Callum, to tell you the truth, the iron and steel companies in our country have no iron ore available. During the negotiation period, how will their iron ore supply be resolved?"

"We can agree on an interim price and solve some of the iron ore transactions first," Callum said, holding back his embarrassment. He didn't believe that Chinese companies no longer had iron ore. This was clearly Qin Hai's coercion in a disguised form, but he didn't have a good way to crack it.

"How to set the temporary price?" Qin Hai took advantage of the victory and asked.

"Just an increase from last year..." Callum said.

"I think it's better to maintain the price of last year." 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 the Chinese people. This is what we are most anxious about." Qin Hai nodded in satisfaction and praised.

"This is what we should do..." Callum said helplessly. Then, with a flash in his eyes, he asked meaningfully: "So, what does Mr. Qin think about this forum?"

Qin Hai pretended to be thinking, and said: "Well, I just thought about it, and the full implementation of replacing steel with plastic will also have a negative impact on us. So, 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, you go to adjust the rules of technology transfer, requiring the transferee to only produce according to the output specified in the agreement, and charge a higher licensing fee for the excess.”

"I think this is a better technology transfer model." Callum complimented just right, and at the same time a stone fell to the ground in his heart.

If it wasn'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 usual licensing fee, and it is almost difficult to recover the research and development costs. Now that Callum has bowed his head, of course Qin Hai must quickly reduce his losses. What has been promised on the forum cannot be reversed, but I only said authorization, but did not say the quota of authorization. For example, I ask you to produce no more than 2,000 tons a year. Isn't this requirement too much? If you are optimistic about the market and want to produce more products, then you can add 100% of the licensing fee.

Callum and his party left China in a depressed mood, and the negotiating team sent by the Chinese side soon rushed to Brazil again to start the second round of iron ore negotiations with Vale. This time, Qin Hai didn't go there in person, but he knew that with the sword of Damocles hanging over Callum's head, it was impossible for him to be arrogant.

The negotiation progressed smoothly. After several rounds of negotiations, Vale finally confirmed the supply price to China this year with an increase of 8.7% compared with last year. The two parties also agreed that next year's iron ore price shall not increase by up to 10% on the basis of this year's price, and the specific price will depend on the international economic situation. After the negotiation between Vale and the Chinese side was completed, BHP Billiton also adjusted the price of iron ore this year, only a small increase on the basis of last year, which is also within the acceptable range of the Chinese side.

Just when the good news came from the iron ore negotiations, Pang Yongfu sadly left his office and handed over the authority of the general manager of Hongyuan Iron and Steel Company. At this time, according to the new institutional setting plan, the Economic and Trade Commission has been merged into the Ministry of Commerce, and its power to manage enterprises has been assigned to the newly established State-owned Assets Supervision and Administration Commission. During the inspection of the State-owned Assets Supervision and Administration Commission, the above party delivered an important speech, which specifically mentioned that state-owned enterprises should shoulder social responsibilities, and directly named Hongyuan Iron and Steel Company, saying that it performed poorly during the iron ore negotiation period and lost the overall concept that state-owned enterprises should have .

There are very few companies that can be directly named and criticized by the above. This speech directly decided the fate of Pang Yongfu. The unpopular unit for the elderly has gone.

In the entire steel system, no one cared about Pang Yongfu's resignation, and everyone was busy expanding production scale to welcome a new round of infrastructure blowout.