In fact, fine ore increased by 79.88% and lump ore increased by 96.5%. Now we have to clarify two concepts, because many people think that the price of this ore has risen by more than 90% since it came out. In fact, in our ore consumption structure, the proportion of fine ore is very large. For example, in 2008, China will import 430 million tons of iron ore, more than 90% of which is 95%. Only about 5% is lump ore, so your lump ore has increased by 96.5%, which in itself accounts for a small proportion of our overall expenses. Therefore, it is a concept that people are most concerned about the fine ore that has the greatest impact on the cost of steel itself, which is 79.88%.

The second question is, suppose 79.88%. Let's talk about whether the price increase is appropriate or not. First of all, I think 79.88% is the result of both sides winning. Why is * * * the result of winning? During the open negotiations between the two parties, after Nippon Steel and Brazil's Tamsui Valley reached 65% and 7 1.5% agreements, Rio Tinto sought freight subsidies. The reason why it has been delayed until now is that China Iron and Steel Industry Association has led 16 large steel mills in China, including all the members who imported Australian mines from China, to carry out arduous negotiations and struggles. They have made a lot of efforts in the middle, and of course Rio Tinto has also done a lot of work. The negotiation has been dragged on and solved. There are many stories that we don't need to tell, which shows that the negotiation was very difficult and persisted to the end.

According to Rio Tinto's original idea, his asking price may be as high as 85% or 95%, but now the result is that it has not reached 85%, let alone 95%, but has reached a level close to 80%-79.88%, which shows that our negotiations have finally been controlled below 80%, and 79.88% is very close, but it has not been reached. In fact, after a long battle, the two sides reached a * * * win result. * * * won because China also realized that we are still the largest importer of iron ore, and we cannot do without iron ore. Second, Rio Tinto is also aware that China is its largest consumer and is unwilling to further strive for China enterprises in this market. In fact, both sides made concessions in this place, and the result was put down.

There is also a win-win situation here. For Rio Tinto, he asked for freight subsidies. Although he will not increase in this agreement, he actually has a freight subsidy through his price increase, because the proportion of 65% in Australia and Brazil's Vale is 80%, which is equivalent to an increase of 15 points. In dollars, it is estimated to be 8 to 10 dollars, which is equivalent to our extra money. As far as China is concerned, we have not suffered. Why not? If you follow 85% and 95%, you will suffer a big loss, but if you follow 65% and 70%, it is out of the question, which shows that China is now looking at the problem according to market behavior.

I say he is a good result because this negotiation with Rio Tinto seems to have broken the original negotiation framework and rules. In fact, we can't stick to the rules now. Are the rules formulated before completely correct? What principles and rules are good rules? Both sides of the negotiation can accept it. Because the original rules were formed before China became the largest importer of iron ore, and now 70% and 80% of their new production capacity comes to China every year, in this case, the old rules can no longer be followed. Coupled with the China factor, the demand in China is so great. In this realistic situation, we should consider this aspect. Although the original negotiation rules have been revised, it can only be said that it is based on the actual situation and a manifestation of keeping pace with the times. Why? You have to be tough, 65% is out of the question. What if we can't talk? If someone sells spot ore now, we will suffer the most, so it is also successful from this perspective.

Through this negotiation, although many people are worried that the original rules of the game have been changed, the original rules of the game have been settled. For example, the three major mines have been discussed, and now they are relatively implemented. Isn't it all messed up this year? Now worry about this problem. But now we have to put ourselves in a changing position in the world, and the economic development is also changing. With the development of China itself, the demand for resources behind it may far exceed that of other countries, because our economy, technology and population are expanding, and we are in a period of rapid construction. We need to call it the harmonious development under the current environment, which is a very good mechanism. It's not a bad thing to talk about this time. That is, China has found its own way to deal with the problems in international economic development. At the same time, we can see that in recent years, we have made continuous progress in iron ore negotiations. Last year, 9.5% of Baosteel decided to win the ore because we won the right to start the ore negotiation. This year, we keep pace with the times and get close to reality. On the basis of mutual benefit, we took this rule down, indicating that the dominant power in the later period is basically in China's hands. We won the right to start last year. This year, we won for so long, after hard negotiations. This matter is basically in China. You should look at it from this aspect. In other words, since then, China has not only made great progress in formulating rules, adjusting mechanisms and negotiating skills in international iron ore negotiations, but also become a core participant.

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