1. Fee
For the price of mineral products, cost is a key factor. The sales price of mineral products production enterprises takes the cost as the lower limit, and only when the price is higher than the cost can the enterprises obtain certain profits. The price of a product is determined by three parts: cost, profit and tax. As far as the market price of similar mineral products is concerned, it is mainly affected by the average social cost. According to statistics, the cost of mineral products accounts for about 70% of its ex-factory price on average, which means that cost is the most important factor affecting the price [1].
Hundreds of years ago, aluminum products were extremely rare, and royal nobles used them to show their dignity. Now aluminum products have entered the lives of ordinary people. The reason is that in the past, the production cost of aluminum products was very high, which led to high prices. Now, due to technological progress, its production cost has been greatly reduced, making the price acceptable to most people.
2. Supply and demand
The price of mineral products is influenced by the relationship between supply and demand of mineral products. When the mineral products market is in short supply, the price will rise; When the market demand for mineral products is less than the supply, the price will fall. On the other hand, price changes affect the total supply in the market. When the price is high, the supply decreases, and when the price is low, the supply increases. American crude oil inventory data has always been the vane of international crude oil prices, with declining inventories and rising crude oil prices; Inventories increased, while crude oil prices fell.
At the beginning of 2008, the rapid rise of coal price in China was caused by the market demand being greater than the market supply, while the decline of coal price after July 2008 was caused by the market demand being less than the supply.
3. Politics
Geopolitical stability and government intervention will affect the price of mineral products. Geopolitical stability, relatively stable mineral prices; Geopolitical instability, especially war, will lead to a rapid rise in mineral prices. In order to maintain economic order or for other purposes, the government can intervene in the price strategy of enterprises through legislation or other means. Government intervention includes setting gross profit margin, setting the highest and lowest prices, the floating range of the highest price limit or the examination and approval procedures for price changes, and implementing price subsidies. For example, the geopolitical crisis in the Middle East pushed up the price of crude oil.
4. Economy
Economic development and capital investment will also have an impact on mineral prices. During the period of steady economic growth, the prices of mineral products generally rose; When the economy fluctuates, the price of mineral products will fall. Hot money, capital and speculators' speculation on mineral products will raise their prices in a short period of time. For example, the international crude oil price rose rapidly in the first half of 2008, and the speculation of capital was the main reason. At present, under the global financial crisis, investors buy a lot of gold, which makes the international gold price continue to climb.
5. Finance
Finance has a direct impact on the price of mineral products. Financial stability and price stability of mineral products; Financial turmoil and falling mineral prices. The most obvious example is the international financial turmoil that began in September 2008, and the prices of various mineral products fell sharply. In recent years, the continuous depreciation of the US dollar has led to an increase in the price of mineral products.
6. Policy
The influence of policies on mineral prices is manifested in many aspects. The national price policy, import and export policy, financial policy, tax policy and industrial policy will directly affect the price of mineral products. For example, at the end of 2006, Indonesia, the world's major tin producer, announced restrictions on tin exports, which led to a sharp rise in tin futures prices.
7. Market competition
Market competition is also an important factor affecting price setting. Generally speaking, the price of mineral products is inversely proportional to the degree of competition. The fiercer the competition, the lower the price; On the contrary, the less competition, the higher the price [2]. According to the degree of competition, the pricing strategy of enterprises will be different. According to the degree of market competition, it can be divided into three situations: perfect competition, imperfect competition and complete monopoly.
(1) perfect competition: the so-called perfect competition is also called free competition, which is an idealized extreme situation. Under the condition of perfect competition, mineral products are homogeneous, and there is no difference in quality and function. In this case, neither the buyer nor the seller can influence the price of mineral products.
(2) Incomplete competition: It is between complete competition and complete monopoly, which is a typical market competition in reality. Under the condition of imperfect competition, there are at least two buyers or sellers, and a few buyers or sellers have great influence on the price and trading volume. Buyers and sellers have insufficient market information, their activities are limited to a certain extent, and the similar mineral products they provide are different. So there is a certain degree of competition between the two.
(3) Complete monopoly: it is the opposite of complete competition, which means that the supply of a mineral product is completely controlled by monopoly, forming an exclusive market. In the case of complete monopoly competition, the quantity and price of transactions are unilaterally decided by the monopolist. Complete monopoly is also rare in reality [3].
8. Product substitution
The appearance of substitute products will greatly restrain or reduce the price of mineral products, but because each mineral product has its own characteristics, even if substitute products appear, they can only replace some of its functions, and often the production cost of substitute products is relatively high, so it is difficult to popularize them, so the impact of product substitution on the price of mineral products is not obvious in the short term. For example, new energy has been developed for a long time and has been widely used, but it has little impact on the price of conventional energy.
To sum up, the change of mineral prices is the result of the comprehensive influence of many factors. In different periods and under different conditions, the influence of various factors on mineral prices is very different. Therefore, the most important thing to analyze the mineral price is to clearly analyze the external environment at that time, so as to grasp the most important factors affecting the mineral price and make a thorough analysis, and then draw an accurate conclusion.