Competition for oil, iron ore and rare earths

In 2008, China became the second largest country in import and export trade. The trade in finished products has reached more than 90%, and the import and export trade structure has reached the level of developed countries. At the same time, the trade volume of China’s economically-needed resource products has also increased significantly; some resources, such as the export of rare earths, have also become more and more important to the world. The fluctuations in the prices of those bulk resources are related to the development of our national economy.

Oil is an important aspect of this. After the Daqing Oilfield was exploited, China was removed from the “oil-poor oil country” hat. However, we also cannot claim to be a "oil-rich country." With the continued rapid growth in the 30 years since China’s reform and opening up, the demand for oil has soared. At present, China's annual consumption has reached about 370 million tons, of which, in 2009, China’s oil production reached 189 million tons, and other countries only rely on imports. That is, 48.9% of the oil comes from foreign countries. The joint exploitation of oil with some foreign countries, the acquisition of major international oil companies, and the purchase of oil are all directly related to our national economy. Moreover, the current market has been in succession. Changes in the price of overseas oil often and closely affect domestic production and people's lives, especially those of the motorists.

Petroleum pricing power is not in us, in the United States and OPEC. In recent years, the price of oil has fluctuated dramatically, affecting people's hearts. After World War II, the world experienced an era of low oil prices. The developed countries really enjoyed the sweetness of low-priced oil and nourished themselves. By 1990, oil was still at a low price of US$10 per barrel, and in 2008 it had risen to US$147 a barrel. Shanghai Jinshan Petrochemical Co., Ltd. bought a large batch of ** when it bought a barrel of oil at US$ 134. Unexpectedly, “Experts predict that the US dollar will break through 200 US dollars.” Failed, and oil fell to more than 30 US dollars a barrel (of course, The financial crisis was a factor of economic recession.) The company had a huge loss of more than 7 billion. China Aviation Oil is losing money in the same way. Some airlines are still in trouble. Now that oil prices have risen to more than 80 US dollars a barrel, its "trend" is an enigma that the world cannot guess.

It seems that the strategic thinking for the development of the oil industry and the multi-angle operations and response are important tasks for our economic development.

The demand for iron ore is also a problem. China’s steel production has now been “first in the world” for a decade. In 2009, it reached 560 million tons of crude steel, which is about 40% of the world's total crude steel output. The United States, which is second, is roughly 100 million tons at the beginning (in our country, Hebei Province began to exceed 100 million tons in 2007). With such a large steel output, about half of the iron ore comes from its own mine, and China's iron ore grade is low, roughly 33%. Half of the iron ore comes from overseas. Among them, the international "three major mine owners" - Brazil's Vale, Australia's Rio Tinto and BHP Billiton, have more than 60% iron ore grades, and are our major suppliers. In 2007, we imported 150 million tons of Vale, imported more than 90 million tons of Rio Tinto, and imported more than 60 million tons of BHP Billiton.

Nowadays, there is a strange thing in the world: Everything that China needs will continue to rise in price, and what we export will continue to decline. In recent years, the price of iron ore skyrocketed. In 2009, due to the financial crisis, the steel industry in the world was in a downturn, and the price of iron ore decreased. In the international steel industry, iron ore prices have been infuriated and some international companies have blew up scandals. The director of Rio Tinto’s office in Shanghai has been detained and sentenced by public security agencies in China for accepting bribes and revealing trade secrets. In 2010, the world economy recovered and iron ore prices turned back up. Among them, the rise or fall of each percentage point of iron ore price is related to the interests of our country's major state-owned companies, and it is actually the country’s interests.

The competition around iron ore has been fierce in the past decade and will continue to be fierce. The development of China’s economic construction is still in a period of rapid growth. The judgment of the Fifth Plenary Session of the 17th CPC Central Committee is that China is still in a period of “strategic opportunities.” How to find various ways and methods and seek initiative is a matter for our relevant departments and enterprises to make plans for. of.

If oil or iron ore is to some extent "seek others", then rare earths are "seeking us" to some extent.

Rare earth refers to the relatively rare 17 elements in the natural world, and its mining cost is very high, about 40,000 US dollars per ton, mainly used for radio equipment, sophisticated machinery manufacturing, defense industry and other cutting-edge fields. If there is no rare earth, there will be no ipad, no lithium battery, no U.S. space shuttle. 97% of the world's rare earth supply comes from China, and developed countries, especially the United States and Japan, have rare earths from China. Unfortunately, the export price of rare earths in China has been very low. Some time ago, due to some disputes between China and the United States and between China and Japan, we once imposed embargoes and restrictions on the supply of rare earths from the United States and Japan, which caused them to react greatly and even “exclaimed”. It seems that they have poked them. It hurts.

How to play this "card" of rare earth supply, and strive for international trade and even diplomatic initiatives, should also be considered by the relevant departments of strategic and tactical issues.