Hu Xiu·2025-10-10 04:13Core Viewpoint - Recent actions by China regarding strategic mineral resource management have garnered significant attention, indicating a potential shift in its pricing strategy in the global commodities market [1][7]. Group 1: China's Actions in Mineral Resource Management - On September 30, 2023, it was reported that China Mineral Resources Group requested domestic buyers to suspend purchases of BHP's iron ore cargo priced in USD, causing a stir in international raw material markets [2][4]. - On October 9, 2023, China's Ministry of Commerce announced export controls on rare earth-related technologies and items, further emphasizing its strategic approach to resource management [5]. Group 2: China's Position in the Global Market - China is the largest consumer of iron ore globally, importing 1.237 billion tons in the previous year, which is nearly five times the amount imported two decades ago, accounting for approximately 75% of global seaborne iron ore imports [8][9]. - Despite being a major buyer, China has historically lacked pricing power, often forced to accept prices set by suppliers, particularly Australian mining giants [9][11]. Group 3: Historical Context of Pricing Power - From 2003 onwards, China has been the largest buyer of Australian iron ore but has been subjected to unfavorable pricing mechanisms, such as the "first-mover-follow" pricing strategy employed by major mining companies [11][12]. - Significant price increases have been imposed on China, with instances of price hikes reaching as high as 96.5% in 2008, reflecting the lack of negotiation power [13][16]. Group 4: Industry Consolidation Efforts - The fragmentation of Chinese enterprises in the commodities market has contributed to its weak pricing power, prompting the establishment of the China Mineral Resources Group in 2022 to consolidate procurement efforts [21][24]. - The group has initiated centralized procurement for iron ore, representing a significant shift from the previously fragmented purchasing approach of over 600 steel companies [25][26]. Group 5: Future Outlook and Global Infrastructure - China's pursuit of global pricing power in commodities is not aimed at economic hegemony but rather to secure fair benefits for its economic development, especially in light of a new global infrastructure cycle [34][40]. - The anticipated infrastructure investments in the Middle East and emerging economies present opportunities for China to leverage its position in the iron ore and rare earth markets, which are critical for construction and new energy projects [35][39].