Review of China's steel trade industry and enterprise development, can be roughly divided into the following three stages:

 

The first stage, the formation and development of the 20th century 80 s ~ 90 s early. Disintegration of the stage of planned economy, further deepening of reform and opening period. Steel is an important means of production as the flow of goods into the market, after a number of local supply units through separation set up the initial share reform, the department engaged in steel trade enterprises. With the development of our country's economy, the relative shortage of steel, as well as the social demand unceasing enhancement, the steel supply and demand environment changed a lot, formed a strong seller's market, the iron and steel production enterprises occupy the absolute dominance in the steel industry upstream and downstream, and the relatively small size of the steel trade enterprises, high degree of dependence on steel mills, relationship with the steel mills often determines the steel trade enterprise business scale and operation stability.

 

The second stage, rapid growth before the financial crisis. The main characteristic of this stage is, on the one hand, from the point of supply, China's steel production increased significantly, from 2000 to 2008, China's steel output by 130 million tonnes to 580 million tonnes, compound growth rate of more than 20%, far more than the other steel-producing countries of the world; On the other hand, from the point of demand, 1998 ~ 2004, seven years to implement a proactive fiscal policy in China, at the same time, real estate in 2003 is listed as one of the pillar industry of national economy, infrastructure construction accelerated, China's surge of investment in fixed assets, 2002-2007, fixed assets investment to complete the forehead and steel sales volume growth in more than 20%. Steel prices during the rising trend of fluctuations, steel market basic present situation of supply and demand balance, and as a result of trade growth, this stage, some large state-owned steel trade enterprises to use its advantages such as capital, channel, and gradually form a distribution network covering the core region and even the whole country. At the same time, the size of the private steel trade enterprises to expand rapidly, combined with its own characteristics such as good flexibility, customer resources dispersed, specialized business, to breed with big steel trade enterprise has formed a certain degree of dislocation competition, the overall strength of the fast growing private steel trade dealer.

 

The third stage, transitional period of 2008 to present. In the second half of 2008 affected by the financial crisis, the steel price from 5000 yuan per ton plunged to 5000 in March 3000 yuan per ton, become the first crisis period of steel trade industry. During this period some small steel trade business capital chain rupture, unsustainable to exit the steel trade and industry, but with the timely implementation of the "4 trillion" economic stimulus plan, to quickly alleviate the impact on steel trade, industry, and later in the rapid growth of the real estate and infrastructure investment, and amount of credit funds, under the support of survival of steel trade, business scale and profit levels quickly recover. The ascension of the boom of industry as well as the low barriers to entry, allowing more of the operator into the steel trade industry, industry competition intensified. Steel for bulk production high sensitivity to the macroeconomic situation, since the fourth quarter of 2011, as the largest steel demand of real estate, construction, automotive and other downstream industries have appeared different degree of decline in demand or growth is slowing, but at the same time China's steel production has continued to maintain rapid growth, 800 million for the first time in 2011 tons, the oversupply of steel market trend widening, steel prices since then shocks all the way down. At the same time, since 2011, the steel trade industry continuing losses that Banks tightened the support of the steel trade suppliers, some Banks even "only accept not borrowed", steel trade industry serious deterioration of external financing environment, financing difficulty and are a sharp rise in the cost of financing, industry profit levels drop, the entire industry is facing more fierce competition, companies are starting to appear differentiation, industry once again into the crisis period, under a lot of the transformation of pressure adjustment.