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Essay / Research Paper Abstract
This 4 page paper reviews in article reporting expected rises in the price of iron ore. Using economic theories the paper demonstrates how the series relates to real life, including the influences on demand, the role of supply and demand and industry structure. The bibliography cites 2 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEironore.rtf
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Unformatted sample text from the term paper:
18th October 2007 addition of the trade publication purchasing there is an article looking at the price of iron ore. The article, titled "World supply giants seeking 30% price hike
for 2008 fiscal year" is a good example of how macro economic theory can be seen in the business world. The article speculates that the large iron ore exporters are
likely to try and increase the prices of iron ore by up to 30% in the following year (Purchasing, 2007). In October 2007 the mining companies along the customers started
their annual negotiations for iron ore shipments which will start the following April. The reason for the potential increase in price is the result of an increase in demand, and
a continued protection of the increasing demand outpacing the increase in supply (Purchasing, 2007). It is projected in the article that the prices for iron ore will carry on
rising until 2010 due to the mining companies being unable to expand at a rate that can keep pace with the demand (Purchasing, 2007). Overall, there is speculation that
prices will increase by up to 50% in 2008. Merrill Lynch and co-analysts estimate that the increase in iron ore supplies in 2008 will be 8%, compared to iron ore
sales increases of 11% (Purchasing, 2007). To understand why prices are increasing and the demand has increased macro economic theory can be considered.
The price of iron or subject to fluctuations; there are relatively few suppliers Companhia Vale Do Rio Doce, Rio Tinto and BHP Billiton control the majority of the market,
and as such there is an oligopoly (Purchasing, 2007). With the demand outstripping supply and the control of pricing the hands of the low number of suppliers it should be
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