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The challenge facing the steel trade business
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The challenge facing the steel trade business

  • Time of issue:2019-01-08

(Summary description)At present many steel trade, competition, enterprise profit space gradually narrowing. In fact, it is also a necessity in any industry inevitably, is the capital of the effect, if the lack of the support of low cost, low price enterprise survival is unsustainable, and for steel trade industry, facing the market is almost perfect

The challenge facing the steel trade business

(Summary description)At present many steel trade, competition, enterprise profit space gradually narrowing. In fact, it is also a necessity in any industry inevitably, is the capital of the effect, if the lack of the support of low cost, low price enterprise survival is unsustainable, and for steel trade industry, facing the market is almost perfect

  • Categories:Company News
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  • Time of issue:2019-01-08 10:33
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1, the industry average profit is low, the cost pressure
 
At present many steel trade, competition, enterprise profit space gradually narrowing. In fact, it is also a necessity in any industry inevitably, is the capital of the effect, if the lack of the support of low cost, low price enterprise survival is unsustainable, and for steel trade industry, facing the market is almost perfect competition market, any enterprise can only be passive recipients of the price, so as to reduce costs is becomes an inevitable choice. But this does not mean that the cost reduction to cut spending and reduce salary, but constantly improve resources such as capital, human resources, the efficiency of capital, etc. Modern logistics industry at present, China's steel industry is still in the small, scattered, low backwardness, steel trade enterprise in the weak position of the supply chain, affected by the steel market volatility is big, no voice on price. And the development of steel industry presents the characteristics of outsourcing, specialization, supply chain. That makes original concentration lower steel trade enterprises, are facing increasing cost pressures and increasingly difficult to survival and development.
 
 
 
2, terminal customers and steel mills short circuit, industry territory
 
Steel trade industry in the whole industry value chain, mainly provide circulation of value-added services, it should be said that from steel mills to produce the product the user's production site, which all of the links are steel trade industry profit margins, but in fact mostly big steel mills have formed their own sales team and logistics distribution system, mostly have down posture, and once the action is steel trade industry is difficult to match. Throughout the industry enterprise, can finish the whole industry value chain is very few, be of good is more rare. From the industry, the logistics is mostly dependent on third party logistics, so as for the industry of logistics links, can be said to be under the control of the logistics industry, logistics industry in the face of fierce competition has been very, steel trade enterprises to enter is relatively more difficult. Industry enterprises, in general, the operation mode of the main or help steel distribution and make the net difference between give priority to customers and resources. And in steel prices more transparent information today, steel trade, profit space is narrow.
 
 
 
3, industry low barriers to entry, increasingly fierce competition
 
The rapid development of China's steel industry, big market, low threshold, high profit, prompted China's iron and steel circulation industry in recent 20 years has been the development of high speed. Also, was driven by a steel industry profits a few years ago, made a number of private steel traders developed rapidly. However, with the increasing perfection of the market pattern, as well as the development of the scientific, fine spring tide, individual, give priority to with family system of steel traders in the past. Manufacturer of flat roads, direct marketing, and leads to the increasingly fierce competition in the market; Especially facing the steel price "upside down", under the condition of the factory price is higher than market selling price, make steel traders on the traditional "base and buy when, expensive and sell" profit model has been difficult to profit, can not help but no profits and operate at a loss, some steel trade business in a difficult position.
 
 
 
4, foreign steel trade logistics giant break into the Chinese market
 
Early because of China's steel market is not standard, poor integrity, make foreign capital to enter the Chinese market. The steel wholesale, especially logistics of steel processing and distribution, become a hot spot of foreign investment. Such as mitsui of Japan is successful in China firmly established steel processing and distribution of supply chain link. Mitsui, starting in 1995, in our country in central and eastern established a joint venture with baosteel, wisco, etc all kinds of steel processing and distribution companies, and steel consumption in the country to establish a system of machining center, build a can provide service for customers at home and abroad rapidly steel distribution logistics system, the basic control of the car plate in China, household appliances and other high-grade steel market. In addition, there are a lot of foreign steel trade enterprises have entered the Chinese market and gain terminal distribution with domestic steel trade business.

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