China has been planning for 16 years, and 2 million tons of iron ore from Simandou have been shipped out; China not only regained the pricing power of iron ore, but also the settlement in RMB has become a certainty.
When 2 million tons of iron ore from Guinea, Africa were shipped out, BHP of Australia understood that from now on, Australian iron ore companies will no longer be able to regain the pricing power, and the settlement in RMB has become a certainty.
The three major iron ore producers and exporters globally include Vale of Brazil, Rio Tinto of Australia, and BHP of Australia. Previously, Australian iron ore companies had long held the pricing power.
In 2009, as the world's largest buyer of iron ore, China was unwilling to have no bargaining power over iron ore prices, so it negotiated with Rio Tinto and BHP. However, Rio Tinto's business spy Hu Shitai stole a large amount of our confidential information, causing our efforts to fail. As a result, Chinese steel companies paid more than 700 billion yuan in extra costs for importing iron ore over the next six years.
China naturally could not accept this situation. Therefore, China has been planning for 16 years, not only reaching an agreement with Vale of Brazil for RMB settlement, but also deeply involving Chinese capital and technology in the Simandou iron ore project in Guinea, Africa. The discovery and development of this mine, known as "the last untapped super-large high-quality iron ore deposit in the world," means that China has obtained a "Plan B" capable of changing the game rules at the resource level, gaining strategic confidence and practical choices to escape a single supply source.
This series of measures has directly reshaped the pricing pattern of iron ore trade between China and Australia. In the past, Australian mining giants, relying on their dominant supply position, had significant influence over pricing and settlement currency. Now, the situation has changed. If Australian mining companies still refuse to accept RMB settlement, China will have the ability and confidence to adjust its import strategy in stages and suspend the purchase of some Australian iron ore.
Iron ore, as the second largest commodity after oil, has long been settled in US dollars. The settlement of iron ore in RMB is a serious blow to the US dollar hegemony. It has effectively promoted the internationalization of the RMB and gradually eroded the global financial privileges maintained by the United States through the dollar.
Original: www.toutiao.com/article/1846881700184132/
Statement: This article represents the personal views of the author.