146: Chapter 146 The Iron Ore Game

Shanghai, Jinjiang Hotel.

The cold rain of the twelfth lunar month lashed against the floor-to-ceiling windows, turning the lights of the Bund into blurred halos.

The air in the top-floor conference room was even colder than the weather outside.

On both sides of the long table, the Chinese negotiation team and the Australian delegation had been deadlocked for a full day. The ashtrays were piled high with cigarette butts, and teacups were emptied and refilled, again and again.

Zhang Xiangyang, the Purchasing Director of Tangshan Steel Group, had worn the edges of the documents in front of him. His fingers tapped on the keyboard, typing and deleting, deleting and typing.

Director Li of the China Iron and Steel Association sat at the head of the table, his brows knitted into a frown.

Opposite him, Mark Harris, the APAC President of Rio Tinto, leaned back in his chair with his legs crossed. He twirled his pen over and over in his hand, his face wearing that peculiar, casual arrogance typical of the British.

"Director Li, Director Zhang." Harris tossed a Platts Index price sheet onto the table, his voice unhurried. "The long-term contract price for the new quarter is one hundred forty-five dollars per ton, a twelve percent increase."

"Agree, and we sign the contract now. Disagree, and you can keep waiting."

Zhang Xiangyang's blood pressure instantly surged to his head.

"Mr. Harris, are you insane?" He slammed a palm onto the table, his voice kept extremely low but carrying an irrepressible fury. "Iron ore inventory at the forty-five major ports across the country has already exceeded one hundred million tons, hitting a historical high!"

"The yards at Rizhao Port and Tangshan Port are almost full, and the port clearance volume is dropping every day. On what grounds are you raising the price by twelve percent?"

Harris spread his hands, his smile remaining unmoved. "Whether the inventory is high or not is an issue for your East Asia ports; it has nothing to do with us."

"As long as your blast furnaces don't go out for a day, you have to buy our iron ore. That is how the market works. As long as there is demand, the price remains."

"That's not market law; that's a monopoly!" Zhang Xiangyang gritted his teeth.

"Call it whatever you want." Harris picked up his teacup and blew slowly on the foam. "Regardless, this price will not change."

Director Li gripped his pen tightly, his knuckles turning white.

He remembered that during the negotiations last year, the Australians had the same look on their faces.

The year before that, too.

And the year before that.

It was the same every year.

The blast furnaces of East Asia's steel mills could not be stopped; stopping meant losses of billions.

The Australians knew this, raising prices every year, harvesting them like leeks.

"Harris, last year you used the mining disaster at Vale in Brazil to hype the price from ninety dollars to one hundred thirty."

"This year, the inventory has doubled, yet you still want to raise prices. This is completely inconsistent with the fundamentals of supply and demand." Director Li's voice was flat, but every word seemed squeezed out from between his teeth.

Harris scoffed, put down his teacup, leaned forward, and crossed his hands on the table.

"Director Li, in the iron ore market, whatever we, Rio Tinto and BHP, say is the fundamental."

The conference room was silent for a full five seconds.

Zhang Xiangyang's phone buzzed once, but he didn't look at it.

Director Li's phone also buzzed, and he didn't look at it either.

At this moment, who had the heart to look at their phone?

Harris pulled another document from his briefcase and threw it onto the table. "If you think one hundred forty-five is too high, then we can change the method of cooperation."

"Platts Index floating pricing, following the market trend. However, I must remind you that the index has been rising recently."

Director Li took a deep breath, opened the document, and glanced at it.

Platts Index: one hundred forty-seven dollars.

Two dollars higher than the long-term contract price.

"Harris, you are forcing us to sign a treaty under duress."

"No." Harris smiled. "I am helping you recognize reality."

The conference room door was pushed open gently.

Everyone's gaze turned to the entrance.

Cheng Beixiao took a deep breath, pushed the door open, and walked in.

Then he saw a group of people in the conference room looking at him in unison.

This made Cheng Beixiao's heart skip a beat; the last time he saw so many big shots was at his graduation ceremony.

Cheng Beixiao feigned composure, with no expression on his face. This was the first thing he learned after coming to DYB Technology: even if you are panicking to death inside, you cannot show it on your face.

Director Li looked at him and frowned. "Who are you?"

"Director Li, Director Zhang." Cheng Beixiao walked quickly to the long table and bowed slightly. "I am Cheng Beixiao, the Supply Chain Director of DYB Technology Group. I am assigned by the headquarters, and President Fu has asked me to represent him fully in today's negotiations."

Zhang Xiangyang was stunned for a moment. "President Fu? Which President Fu?"

"Fu Haoran, the Chairman of DYB Technology." Cheng Beixiao said as he placed the folder in his hand on the table, opened it, and turned to the first page. "DYB is a client of the steel industry, purchasing hundreds of thousands of tons of high-strength steel every year."

"Steel price hikes directly affect our production costs. President Fu heard that the Australians wanted to raise prices, so he specifically sent me to understand the situation."

Director Li and Zhang Xiangyang looked at each other.

They hadn't seen this young man before, but they knew DYB Technology—a leading America new energy enterprise that had expanded rapidly in recent years and was indeed a major client in the steel industry.

"Director Cheng, please sit." Director Li pointed to the empty seat next to him.

Cheng Beixiao pulled out the chair, sat down, and placed the folder in front of him.

At this moment, footsteps came from the corridor.

Harris walked back with his coffee cup, and seeing Cheng Beixiao, he frowned.

"Director Li, who is this? This is our closed-door negotiation; how can just anyone enter?"

"Mr. Harris, this is Cheng Beixiao, the Supply Chain Director of DYB Technology." Director Li's tone was indifferent. "DYB is an important downstream client of our domestic steel industry. Steel price hikes directly affect their production and operation. It is reasonable for him to sit in."

Harris looked Cheng Beixiao up and down, snorted, and said nothing more.

The negotiation continued.

"Director Li, my bottom line is one hundred forty." Zhang Xiangyang gritted his teeth. "One hundred forty-five, we at Tangshan Steel will absolutely not accept."

"One hundred forty?" Harris laughed. "Director Zhang, are you joking with me? One hundred forty isn't even enough to cover our costs."

"Your costs?" Zhang Xiangyang almost laughed in anger. "Your Australian open-pit iron mines have an extraction cost of less than twenty dollars per ton. You're telling me one hundred forty isn't enough to cover costs?"

"That was more than a decade ago." Harris waved his hand. "Now, labor, environmental protection, transportation—what isn't rising? Besides, the market price is one hundred forty-five; we cannot do business at a loss."

"At a loss?" Zhang Xiangyang slammed his pen onto the table. "Sixty percent of the steel mills across the country are losing money, and the profit per ton of steel isn't even enough to buy a pack of cigarettes. You're telling me you're losing money?"

Harris shrugged, picked up his coffee cup, and blew on it slowly.

"That is your problem."

Director Li finally spoke, his voice not loud but carrying a heavy, weary tone.

"Harris, it's not that we don't want to negotiate, but we really cannot bear this price."

"Domestic demand for steel is slowing down, real estate is being regulated, and infrastructure investment is also shrinking. Steel mills cannot sell at high prices, but procurement costs keep rising. If this continues, the entire industry will lose money."

Harris set down his coffee cup, leaned forward, and crossed his hands on the table.

He looked into Director Li's eyes, a faint, condescending smile on the corners of his mouth.

"Director Li, let me do the math for you clearly."

He extended one finger, nails neatly trimmed, and tapped on the tabletop, making a crisp sound.

"Last year, your East Asia imported one billion tons of iron ore, sixty-five percent of which came from us in Australia. We made a net profit of fifty dollars per ton from you, which is fifty-five billion dollars, equivalent to over three hundred billion RMB."

The second finger went up.

"It costs tens of billions to build a high-speed railway. Three hundred billion is enough for you to build seven or eight high-speed rail lines running from north to south."

The third finger.

"Your steel mill workers earn five thousand yuan a month. Three hundred billion is enough to pay five million workers their wages for a whole year."

He withdrew his hand and leaned back, the arrogance in his smile almost overflowing.

"Director Li, this isn't us being heartless. It's that your high-rises, bridges, and high-speed railways are all built with our Australian iron ore."

"Without us, your steel mills would all have to close, and workers would all be unemployed. As long as your blast furnaces are still smoking, you have to buy ore from us. We will always be the ones who dictate the price."

Zhang Xiangyang's fists clenched until they rattled, his nails digging into his palms.

Director Li's face flushed red, his lips trembled, but he couldn't say a word.

Harris paused, picked up his coffee cup again, his tone light, as if talking about an insignificant matter.

"Besides, more than a decade ago, you were able to leak your negotiation bottom line to Rio Tinto. Even if we gave you a low price now, there would be plenty of people within your ranks who would sell the news to us."

"Director Li, I advise you not to waste your effort. Accepting the price hike is good for everyone."

The conference room fell into instant silence.

The Stern Hu case.

That was a scar that the entire East Asia steel industry hadn't been able to erase for over a decade.

Cheng Beixiao sat in the corner, watching all of this.

His heart was beating fast, and his palms were full of sweat.

Cheng Beixiao knew he shouldn't speak.

He was just a fresh graduate, having been at DYB for less than half a year.

Sitting opposite him was the President of Rio Tinto APAC, and sitting beside him were the Director of the China Iron and Steel Association and the Purchasing Director of Tangshan Steel.

Who was he?

What qualifications did he have to speak in such an occasion?

But Cheng Beixiao's phone buzzed once in his pocket.

Cheng Beixiao secretly took a look.

It was a message from Fu Haoran, with only one sentence:

[Now, say it according to the script I gave you. If any problems arise, I will take responsibility.]

Cheng Beixiao took a deep breath.

He didn't know if he could do it.

But he knew his boss was watching him, and the script was already prepared for him. He just needed to read it and get the job done.

Cheng Beixiao closed the folder and stood up.

The chair legs made a soft sound on the floor, and everyone's eyes turned to him.

"Mr. Harris." Cheng Beixiao's voice was a bit tight, but steady enough. "May I ask you a question?"

Harris frowned and looked him over. "Speak."

"You just said that East Asia cannot do without Australia's iron ore. One billion tons annually, sixty-five percent from Australia." Cheng Beixiao opened the folder and glanced at the numbers on it to confirm he hadn't misremembered. "Then what if, I mean what if... East Asia suddenly doesn't need to import so much from Australia anymore?"

The conference room was quiet for a moment.

Harris laughed, laughing very casually.

"Young man, do you know what East Asia's annual iron ore demand is? One billion tons. The global iron ore trade volume is only 1.5 billion tons. You say you don't need it, so you don't? Can your blast furnaces stop?"

"The blast furnaces cannot stop." Cheng Beixiao said, "But what if someone can provide cheaper, higher-grade iron ore than Australia?"

The smile on Harris's face stiffened for a moment.

"What do you mean?"

Cheng Beixiao didn't answer but pulled a stack of documents from the folder and walked to the long table, placing them one by one in front of Director Li, Zhang Xiangyang, and Harris.

"This is the inspection report of a super-large, high-grade open-pit iron mine in South America. Sixty-five percent iron grade, with extremely low content of impurities like sulfur, phosphorus, and silicon. The quality is superior to Australia's."

He pulled out a few more photos and spread them on the table.

"This is the photo of the first batch of 50,000 tons of ore being loaded. It is already on the ship and is sailing towards East Asia."

The conference room was so quiet that the humming of the air conditioner could be heard.

Director Li picked up the inspection report, his eyes fixed on the data, his fingers sliding over the paper.

Zhang Xiangyang brought the photos close to his eyes, zooming in, zooming out, zooming in, zooming out.

Harris's face sank.

"What mine is this? Who is operating it? What is the production capacity? Can it provide a stable supply?" He asked four questions in a row, the arrogance in his tone halved.

Cheng Beixiao didn't answer directly.

He turned to the last page of the folder and pushed a price sheet to the middle of the table.

"Long-term contract price, fixed price, not floating with the Platts Index. Thirty percent lower per ton than your quotation today."

The conference room fell into complete silence.

The cigarette in Zhang Xiangyang's hand dropped to the floor.

Director Li raised his head and stared into Cheng Beixiao's eyes, as if trying to see some flaw in them.

Harris's face flushed red, then turned white.

"Impossible." He slammed his palm on the table. "This price isn't even enough to cover the cost. You are falsifying data!"

Cheng Beixiao looked at him; his heart was still beating fast, but his voice was steady.

"Mr. Harris, you don't have to believe it, but the first batch of 50,000 tons of ore will dock at Caofeidian Port in fifteen days. At that time, you can come and see for yourself."

He paused, closed the folder, and tucked it under his arm.

"Director Li, Director Zhang, my mission is accomplished."

"President Fu said that if you are interested, you can contact him at any time. DYB is willing to sign long-term supply contracts with domestic steel mills to prioritize guaranteeing the needs of the domestic market."

He turned and walked toward the door.

Behind him, Zhang Xiangyang shouted, "Director Cheng!"

Cheng Beixiao stopped and turned back.

Zhang Xiangyang stood up, his voice trembling slightly. "What is the annual production capacity of this mine you mentioned?"

Cheng Beixiao remembered what Fu Haoran said on the phone, and the corners of his mouth lifted slightly.

"As much as you need, we have."

He pushed the door open and walked out.

In the corridor, his legs felt a bit weak.

He leaned against the wall, took a few deep breaths, took out his phone, and sent a message to Fu Haoran:

[Boss, I've finished.]

Three seconds later, the reply came:

[Good, hard work.]

Cheng Beixiao stared at the screen and grinned.

He remembered three months ago, when he was still worrying about being laid off.

The rain on the Bund was still falling, but Cheng Beixiao felt the weather was not bad today.

In the conference room, Harris stood up abruptly, his chair toppling backward with a dull thud.

"Director Li, is this your negotiation strategy? Finding a young man who appeared out of nowhere, taking a bunch of photos of unknown authenticity, and trying to force down our price?"

Director Li didn't look at him, just stared at the inspection report in his hand.

His finger lingered on the words "Grade: 65%" for a long time.

"Harris, I have something I want to tell you."

"What?"

"This afternoon, when this Director Cheng walked in, I received a message. I hadn't had time to look at it yet."

Director Li picked up his phone and lit up the screen.

It was a breaking news notification that had just been pushed:

[Global Times: The Colombian government announced that it has initiated liquidation procedures for the assets of Emilio Rojas, the leader of the Medellín Group, including three high-grade iron mines located in the Antioquia Department.]

[The Colombian Minister of Mines stated that the iron grade of these mines has been tested to be as high as 65%, with extremely low impurity content, and the first batch of 50,000 tons of ore has been loaded and shipped to East Asia.]

He scrolled down another screen.

[Cailian Press: Colombia has achieved a "zero breakthrough" in iron ore exports to China. Analysts believe this move may break the long-term monopoly of Australia and Brazil on the supply of iron ore to East Asia.]

Director Li put down his phone, raised his head, and looked at Harris.

Harris didn't know what Director Li had seen, but he saw the corners of Director Li's mouth move.

It wasn't a smile, but an expression he had never seen on this East Asian official's face before.

It was relief.

Like someone who had been holding their breath under water for too long, finally surfacing and taking their first breath of fresh air.

Director Li pushed the inspection report gently toward Harris, his voice steady, but carrying unprecedented confidence.

"Mr. Harris, I think our negotiation today needs to start over."

The rain outside the window stopped, and the lights of the Bund pierced through the clouds, falling on the long table in the conference room.