Supply and demand in the steel trading industry
The steel trading industry is greatly affected by the macroeconomic environment and market supply and demand conditions. At present, my country is still in the process of industrialization and urbanization in general, and the characteristics of industrialization dominated by heavy industry have not changed at this stage. With the advancement of industrialization and urbanization, the market demand for steel will still be relatively large. The basic trend of continuous growth of my country’s iron and steel industry demand has not changed, and there is still room for further development of the iron and steel industry. The current short-term oversupply is staged and structural.
In the long run, the sustained growth of China’s economy and the stable growth of fixed asset investment will provide strong support for the growth of domestic steel demand, and the slow recovery of the global economy after the financial crisis will also drive China’s steel exports. With the gradual implementation of structural adjustment, elimination of outdated production capacity, mergers and reorganizations in the iron and steel industry, the contradiction between supply and demand in the domestic market will be effectively alleviated.
Competitive Landscape of Steel Trade
At present, a stable competition pattern in China’s steel trading industry has not yet formed, and the number of enterprises in the industry exceeds 100,000, with a low degree of concentration. Large-scale distribution companies covering the whole country relying on the advantages of capital, channels, and supply chain integration have initially formed; large and medium-sized regional distribution companies located in major steel production areas, concentrated demand areas, or with unique advantages; and demand-oriented companies. Many small and micro steel trading enterprises established regionally or relying on the main steel markets in my country’s economically developed regions. At present, large-scale distribution enterprises have strong financial strength, the industrial chain extends upstream, a wide range of business varieties, close relationship with steel production enterprises, and strong advantages in the stability of supply channels and bargaining power.
At the same time, large-scale distribution companies have a wide sales network, well-developed storage facilities and logistics distribution systems, and high operating efficiency. The annual sales volume of steel products is generally more than 10 million tons. Relying on the advantage of being located in the location of the steel mill or the area where the steel demand is concentrated, the regional circulation enterprises make use of their rich customer resources to form a certain reputation in the region and establish a relatively stable long-term cooperative relationship with the upstream steel mills and downstream customers , The annual sales volume of steel products is generally above one million tons.