Prospects for the 2020 Iron Ore Market.Quantitative Analysis of Market Dynamics and Risk Mitigation Strategies
As the key ingredient for steelmaking, iron ore is integral to the global economy and represents the world's second-largest natural resource market by value. The overall structure and dynamics of the iron ore market have recently undergone various radical changes. The global demand shock caused by the rapid industrialization of China has sent market prices skywards and triggered a collapse of the 40-year-old benchmark pricing system. The newly adopted quarterly index-based pricing mechanism has brought an abrupt end to the traditional stability of the iron ore market, with price dynamics now experiencing greater volatility. Against the backdrop of these disruptive changes, this dissertation proposes a deterministic nine-region spatial equilibrium model of the 2020 iron ore market based on the fundamental characteristics and mechanics of the market. Key features of the model are its bottom-up structure, modeling supply volumes and costs on an individual mine level as well as the simulation of interregional trade flows using a linear optimization approach. In analyzing a number of relevant scenarios, this dissertation projects the key characteristics of the 2020 global iron ore market in terms of regional production volumes, demand, iron ore trade flows and market prices. It quantifies market dynamics based on changes in available production capacity, demand and freight rates. From a demand perspective, the dissertation proposes several strategies to mitigate the risk arising from higher and more volatile iron ore prices. Of these strategies, the captivity of mines and the introduction of iron ore export taxes are analyzed in greater detail with respect to their effectiveness and influence on the iron ore market.
|This book is provided by Rainer Hampp Verlag in its series Books with number 9783866186798 and published in 2012.|
|Contact details of provider:|| Web page: http://www.hampp-verlag.de/|
|Order Information:|| Postal: Rainer Hampp Verlag, Marktplatz 5, 86415 Mering, Germany|
Web: http://www.hampp-verlag.de/ Email:
When requesting a correction, please mention this item's handle: RePEc:rai:rhbook:9783866186798. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rainer Hampp)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.