Domestic steel market downturn to overseas as a lifeline

Since this year, China’s steel prices continue to fall, has reached its lowest level in nearly 10 years. Steel overcapacity and tepid demand, steel market dealers to bring unprecedented pressure. In the face of the domestic steel market continues to weaken, many domestic steel manufacturers began to abroad, hoping to open up an outlet in overseas markets, the world’s largest manufacturing enterprises electric business platform for the factory of the world brought together a large number of iron and steel manufacturers, with the help of via “export” services, such as iron and steel enterprises begun to cross-border electricity.

Domestic steel market downturn, steel price as low as Chinese cabbage?

A six cents a kilo, it is not on the market the price of Chinese cabbage potatoes, but recently the market price of steel. According to the physical union steel logistics professional committee of related, according to a report released on September PMI index was 43.6%, the domestic steel industry a fell 4.8% last month. The index has two notches and hit its lowest level since 7 months, five consecutive months under 50% from the line. Many people are surprised that has successfully since 2011 highs “ks” steel prices down, why haven’t found at the bottom.

In fact, China steel prices are low is supply exceeds demand. As is known to all, relatively low technical threshold and is closely related to the property of the steel industry has very obvious periodicity, steel is highly sensitive to China’s economic environment. Now China’s economic growth slowed, especially the downside risk of real estate industry, while Europe and the United States economy improved slow recovery in external demand, but still not enough to offset the influence of the domestic real estate industry. Statistically, this year the main indicators of real estate industry, such as home sales area, new home construction, real estate investment in fixed assets are compared to the sharp decline, the new construction area of the building has six consecutive months of decline, decline in the average rate of 20%. So, even though the price has dropped to half, investors also is unable to avoid the downstream industry to the reality of steel demand continues to shrink.

But at the same time, according to the iron and steel association’s incomplete statistics, China’s steel production capacity of more than 1 billion tons, but now the demand is 700 million to 800 million tons, therefore supply exceeds demand will cause a drop in prices. Leading to poor iron and steel enterprise profit overbuilt, the first seven months of large and medium-sized steel mills profit of 11.328 billion yuan, sales profit margin of only 0.54%, the figure is industry profit margins in the lowest industry.

Experts said that China’s steel prices continue to fall, has reached its lowest level in nearly 10 years, manufacturers and distributors undoubtedly increased the cost and burden, many dealers said, has been in a state at a loss, all want to turn off the store turned.

Move beyond, can rescue?

Don’t sell in the country, it travelled abroad. There are media reports that due to slowing demand and tightening environmental regulations in China, and the domestic market sales more and more difficult to reduce the increasing burden of debt, China’s steel makers are hoping that export out of trouble. According to the China iron and steel association statistics, this year July 1 to the total domestic crude steel production year-on-year increase of 12.49 million tons, and increased exports amount to 13.71 million tons of crude steel, crude steel exports increase more than the increase of crude steel, that is to say the first seven months of this year increased crude steel production for export, a number that created the record high export amount.

Experts point out that this year’s steel export bonanza has several major factors, one is the Europe and the United States and other developed countries have already begun to economic recovery, steel demand has increased; Second, since this year China’s steel prices continued to decline, and constant innovation is low, the steel products in China in the international market has price advantage, to stimulate export steel consumption; Third, the depreciation of the RMB also contributed to the growth of the steel exports.

Of course, benefit from the policy support, cross-border electricity has become the traditional manufacturing enterprises to the positive factors of international trade. The factory of the world network as the world’s largest manufacturing enterprises electric business platform, successfully built the export platform, through the characteristics of the sovereign has recommended, window, extension services, such as industry projects recommended can help enterprises to further global layout, obtaining high traffic, success into order enquiry, attraction of iron and steel enterprises with high cost performance. Now the factory of the world network station has opened six languages, opening export services, enterprises can have bilingual background, under the guidance of dedicated customer service 1 on 1, barrier-free communication operation, will be successful radiation sales to Europe, America, South America, the Middle East, Africa, southeast Asia and other global markets.

Network CEO believes the factory of the world, holding appears in overseas markets, China’s steel industry can not completely get rid of the fate of the “bargain”. According to enterprises in a steel company in the factory of the world network, the company mainly produces high-grade watch gear, although small category, but with advanced technology, superior product quality, is now the “good catch” of the international market. And some low-end products such as iron and steel enterprise rebar, wire rod, etc., in the domestic market is already a bargain, but neglected in overseas markets.

So as we sigh “bargain” iron and steel industry at the same time, only look for the market gaps, with complete product types, stable product quality to reshape the iron and steel industry “platinum market”.