In recent years due to higher iron ore prices, plus the iron and steel industry overcapacity, a significant decline in the profitability of the iron and steel enterprise, listed companies in steel sales year after year. Steel market prices go from bad to worse, the steel industry has entered a meager profit era, the development of the industry as a whole slowed, development situation is very grim.
(1) from the point of production capacity, market capacity of the steel market has remained high. China’s crude steel production has accounted for half of the world market, the need of increase much faster than expected. GDP notion, the development of the local government to make industry policy of continued guidance, irrationality of industrial structure, urbanization construction investment in infrastructure, these have prompted the mythic development of an industry. Recent close down backward production facilities under environmental pressure to improve the schedule, but resolve overcapacity is still a long-term and arduous task.
(2) from the point of demand, steel market fundamentals have been no significant improvements, final demand of the market as a whole in for strong to the weak trend, causes the steel market. On the other hand, China’s economic growth is slowing in the steady, fixed asset investment growth slowed, downstream of the real estate industry, shipbuilding, automobile, machinery, household appliances development is slow, especially the real estate industry is a big downturn for the hong kong-listed drag on, all these lead to the iron and steel demand is insufficient.
(3) the steel industry in recent years has been in a small profit, profit ability is weak. Often rebound in steel prices low, steel repeatedly innovation of composite price index is low, a decrease in total fixed asset investment rose, compared to the same, the whole industry environment.
(4) the traditional steel trading market entity has lost its competitive advantage. Traditional single steel market warehousing logistics service ability, no logistics, cash flow, business flow organization integration ability, traditional steel supply chain is very long, plus steel production management costs (including raw material costs, labor costs, storage management costs) is more and more high, to form the comprehensive competition ability. In this background, the iron and steel industry all the eye on the Internet, steel concern the development of e-commerce.
E-commerce due to its quick and easy, wide range of transactions, transaction cost is low and favor, and steel trade, the traditional forms and present a scene at the same time difficult again, the lack of growth, steel mills for help with emerging industry changes the business difficulties, through winter the will of the strong industry, prompted the steel in the last two years the electricity explosive growth.