"What's wrong? I think your expression seems to be quite complicated?" Fan Heng asked his son Fan Wubing.

Fan Wubing shook his head and replied with mixed joys and sorrows, "How to say it, my mood is more complicated now, and Baosteel has raised its price."

"Baosteel often raises prices, so what's the matter?" Fan Heng said in confusion.

In Fan Heng's impression, once the price rises in the steel market, it means the recovery of infrastructure, which means that the impact of the Southeast Asian financial crisis is far away from China. This should be considered a good thing, right?

"It's mixed with good and bad luck!" Fan Wubing explained to Fan Heng, "If Baosteel's price increase this time is in line with the market trend, it's fine if there is a need to raise prices, but according to my information, the Japanese Mitsui chaebol is gradually controlling this one of the top key steel companies in China, which is worrying."

In fact, the price increase of steel raw materials will inevitably lead to collective price increase in upstream industries, while some low-end raw material suppliers, such as iron ore supply, will randomly move and rush into this price increase trend.

It was only when the domestic market was highly regulated. At the time of effectiveness, it was obviously a bit out of place for Baosteel to make such a move, but for Jiangnan Province, it was not bad news, or a favorable piece of news.

After the huge amount of funds invested in steel enterprises in Jiangnan Province, the steel and metallurgy industry developed very rapidly. The funding problem that restricted the overall development of this industry was suddenly completely solved, and then the explosion of growth followed.

In just the past five months, the output of steel enterprises in Jiangnan Province has doubled, driving the rapid development of various downstream processing industries, and also causing Jiangnan Province's fiscal revenue to begin to increase greatly. More importantly, it provides a strong guarantee for the foundation for the upcoming family car manufacturing industry in Jiangnan Province.

As the weather vane of the domestic steel market, the price increase of Baosteel directly led to a collective increase in sales in the steel industry. In other words, key enterprises in Jiangnan Province suddenly took the fast development ride and enjoyed huge profits from the beginning.

Naturally, with the strengthening of the steel market, the iron ore market is also about to rise. However, due to the fact that Fan Wubing invested in iron ore mines in Australia, Rio Tinto and BHP Billiton did not immediately raise the international iron ore export prices, but chose a more cautious wait-and-see attitude.

Before Jiangnan Province followed Fan Wubing's advice and signed a 50 million tons of iron ore supply contract with Rio Tinto and BHP Billiton, which can ensure that demand within one and a half years is not affected by the rising price factors. In this case, the returns obtained are extremely generous.

So when Fan Heng heard that Baosteel's price increase was not worried, but was a little relaxed. The reason was that the price of steel was rising, which was a heart-warming agent for the developing steel industry in Jiangnan Province.

But the disadvantages are also obvious. The rapid rise in steel prices will inevitably lead to the increase in costs of various infrastructure projects, causing prices to enter a new round of rise. This is very unfavorable for the overall situation. This big order is to be paid by all Chinese people.

Fan Heng thought for a while and knew that Fan Wubing was worried, but he also said to his son, "There are many factors that lead to rising prices. The rise in the steel market is just one of them. We are powerless to do this. Fortunately, Jiangnan Province has a certain amount of reserves so that it will not be in a hurry."

What Fan Wubing thought of was another thing.

At present, the domestic steel market is booming and the prices are rising. Then your layout in Australia can also be launched on a large scale. After all, Fan's Iron Ore Investment Company, which has been preparing for a long time, is time to make a brilliant debut.

Baosteel's price increase is indeed an introduction. The next day, Rio Tinto and BHP announced that the price of iron ore rose by 40%, which is from the original ton price of 18 US dollars to the current ton price of 25 US dollars.

If Fan Wubing had not asked Jiangnan Province to sign a large order in advance, 50 million tons of iron ore, calculated based on the original ton price of 18 US dollars, now it has risen to 24 US dollars, and it would have to pay an additional US$350 million, equivalent to about 3 billion yuan.

Although more than 3 billion yuan is not enough to see in front of big capital, it was enough to save more than a dozen large enterprises in Jiangnan Province in 1998, which was still a large amount of funds. After this, Fan Heng was much more abundant on his hands.

The wind is still calm here in Western Australia. Fan's Iron Ore Investment Company is mobilizing a large number of workers to build a port leading to the sea and a railway transportation line connecting the port and the mining area.

The railway line with a construction cost of up to 2 million Australian dollars per kilometer is a key project built by Fan's Investment Group. Currently, only about one-third of the railway has been built, and the direct investment of 300 kilometers has reached 600 million Australian dollars. In addition, other investments will be invested in a total of 2 billion Australian dollars. This money looks quite terrifying, especially for an iron ore producer, to make back the money, it means selling more than 200 million tons of iron ore.

However, Fan Wubing also considered a factor of rising prices, so he hoped to solve this problem through the capital market. In this way, the money raised through the capital market can be used to build factories, railway lines and ports soon, but the price increase is too fast, which will relieve his own repayment pressure.

However, if you want to do this, you also need to give investors confidence that your company can indeed ensure that its profitability and production capacity are as excellent, and this confidence is more difficult to establish.

"But now this opportunity comes." Fan Wubing said to Fan Heng with a smile, "We are in the Fan Iron Ore Investment Company in Western Australia and will sign a supply contract of 20 million tons with Jiangnan Province. The price is calculated based on 70% of the current price of iron ore."

Fan Heng was stunned for a moment, not knowing what Fan Wubing meant, but if calculated based on 70% of the current price, it would be equivalent to Jiangnan Province being able to obtain 20 million tons of iron ore at the price before the price increase, which means that more than one billion yuan was saved.

"If you do this, will the loss be too great?" Fan Heng asked after pausing for a long time.

Although he was not very clear about the purpose of his son's approach, he was really clear about the real concessions. Such a large business would only make Jiangnan Province more special and capable compared with other provinces.

Fan Wubing said, "This price is secret, but once the order quantity is determined, Fan's Iron Ore Investment Company will gain a firm foothold in Western Australia."

For foreigners, contracts are sacred and inviolable. Once your company obtains a huge order, investors will flock to it with interest. Now that the Fan Iron Ore Investment Company in Western Australia is planning to go public and raise funds in Australia. If you suddenly sign such a large order, it will definitely make the listing process very simple.

This is a method of making money by making money. You only need to invest a small amount of funds in advance to launch the entire project, and then use the power of orders to attract investors, raise funds for later construction by issuing stocks, and resolve their investment risks in this project.

It can be said that Fan Wubing's investment in this project will not exceed 300 million Australian dollars. If it is operated properly, the company can raise billions of Australian dollars to maintain subsequent projects by issuing shares. That is to say, once the company goes public and raises funds successfully, it will be invincible.

Even if the company is transferred directly, it will be enough to allow Fan Wubing to easily earn billions of Australian dollars, or more.

Fan Heng was a little dizzy by his son's capital operation method. Although he was already learning economic knowledge very carefully, he was still a little confused about the tricks in the face of such superb capital operation methods.

However, Fan Wubing was not very interested in explaining it in detail, because the process is simple and there are still many skills to operate, especially the grasp of the timing and the grasp of investors' psychology.

People without deep capital operation skills cannot play such a big business. Although there are many players in the capital market, few people can become famous and finally succeed. The stock god is Buffett, and the financial giant is just Soros. The truth is the same.

"Well, I have figured out one thing anyway." Finally, Fan Heng said to his son with his chin, "Jiangnan Province can save 1 billion yuan in signing this purchase contract. Even if you sell iron ore to others, it will make money. But you will not suffer any losses. Instead, you will be sought after by investors because of your large overseas orders and get rich returns from the capital market? That's right?"

Fan Wubing nodded and replied, "That's right, that's about it."

"Then how should we cooperate?" Fan Heng thought that another major achievement was about to fall on him, and it was also of great help to his son's career. He was a little excited and asked for advice humbly.

"This matter still needs to be discussed for a long time. The most important thing is that we cannot reveal any news before. Once the time comes, we will throw out the contract again, otherwise our goal will not be achieved even if it is too early or late." Fan Wubing replied.
Chapter completed!