Empirical analysis of the influencing factors on iron ore prices

With the rapid development of China´s economy, China is now the largest iron ore consumer in the world. However, due to the particularity of its pricing mechanism, the import price for iron ore in China has been rising in recent years, which leads to a continuous decline in the profits of the iron and steel industry. This paper analyses how international crude oil price and Baltic Dry Index impact on the price fluctuation of iron ore, by employing relevant theories and knowledge such as regressional analysis methods, basic knowledge of mathematical statistics, economics and through econometric software Eview 7.0. Meanwhile, two models on relationship between price fluctuation factors of iron ore and international crude oil price, and price fluctuation factors of iron ore and Baltic Dry Index are built. And conclusion is drawn that there are relevance between the two compared factors. All the findings in this paper will provide certain basis for China´s iron and steel enterprises to make strategic objectives.