Pricing mechanism and principle of stainless steel pipe in international market

We first analyze the international stainless steel pipe pricing mechanism from the perspective of economics. The supply and demand of the international stainless steel pipe market is spoiled by the continuous expansion of the application of stainless steel products and the strong demand of emerging developing countries.

The market control power of the seller represented by the pipe manufacturer is much stronger than that of the ordinary carbon steel and other metal materials industries, making it a monopolist in the international stainless steel pipe market, and it is in a dominant position in the price mitigation. This makes it possible to establish a model of the world pricing mechanism.

From the above analysis of the supply of stainless steel pipes, we know that the international stainless steel pipe market belongs to the seller's monopoly, expressed as a stable positive slope curve. Looking at the overall supply situation of the international stainless steel pipe market in recent years, it can be seen that international stainless steel products have maintained growth, and the price of stainless steel pipes has also increased to varying degrees. It can be assumed that the supply curve of the base stainless steel tube is just like the supply curve in classical economics, that is, the increase of the supply altar is accompanied by the rise of the price, as shown in the model as the positive slope curve S. Through the previous analysis of the demand for stainless steel pipes, we also know that the international stainless steel demand curve is a negative slope curve with less price elasticity.

According to the relationship between demand f and price in the international stainless steel pipe market in recent years, it can be assumed that the demand curve in the model is like the demand curve in classical economics, and it shows a curve with a negative slope, but the elasticity is small, such as the model figure IV. Twelve is shown as D. Assume that the marginal benefit of a stainless steel tube is a steeper negative slope curve below the demand curve. According to the theory of supply and demand of classical economics, in the market of seller monopoly, as the supply of stainless steel increases, the sales price decreases, and the marginal revenue will fall faster. As shown in the model is MR.

As a monopoly seller in the factor market, the factor demand curve faced by the seller is the demand curve of the whole industry. The monopoly seller does not accept the established price as the general seller, but can determine the factor price by controlling the supply of factors. This is because, when the seller monopoly power appears, the monopoly seller will adjust the supply base of the elements according to the principle of MR=MC to maximize the “profit”.

At this time, the seller monopoly will limit the supply of elements. In the model, if the international stainless steel pipe market is completely competitive, then the intersection point E between the demand curve D and the supply curve S is the market equilibrium point. At this time, in the international stainless steel market, the supply of stainless steel pipes is at the Q2 level, and the corresponding price is P2. However, in the actual international stainless steel negotiations, the positions of several manufacturers can reach an agreement, greatly increasing the seller's negotiation weight.

In contrast, the positions of many buyers are often difficult to achieve because of their respective mouths. In the price negotiation, the “prisoner's dilemma” in game theory is often caused, and because of the strong demand, the dependence on imports is very high. High, which further strengthens the seller’s monopoly power. Therefore, in order to obtain excess profits, the stainless steel pipe seller will limit the supply of stainless steel pipes to the level of Q1, and the corresponding price is P1. It can be seen that if the buyer wants to solve the gap in the demand for domestic stainless steel pipes, he can only be forced to accept a certain price increase in the price negotiation, in order to increase the supply of the seller.