the supply side structural reform has been carried out for half a year, but the steel industry in the "disaster area" of inventory is increasingly trapped in a game that is difficult to figure out. in the first five months of this year, china's iron and steel industry experienced repeated price downturn - skyrocketing - plummeting - downturn, and steel prices rose again in late june and early july. in the roller coaster like ups and downs, the daily output of crude steel reached a new historical height of 2314000 tons / day in april. when people are confused about whether the price can rise steadily or just maintain wide fluctuations, european and american countries have raised double anti "big sticks" to china's steel exports
this is a glued game of enterprise, market, management and international factors. it can be said that "random flowers gradually attract the eyes". can private steel enterprises take the initiative and win? the general trend of iron and steel trade integration and reorganization "talking about the impact of supply side structural reform on our company, mainly the reduction and transformation of traditional business and the implementation of integration and merger strategy." a person in charge of ningbo baoning iron and steel co., ltd., a private enterprise, said, "at present, the market competition is fierce. if we do not transform, we will be eliminated by the market. if we do not integrate, others will be integrated."
as a plate and strip trader and processor, baoning iron and steel co., ltd. has an annual sales volume of 200-300 million yuan. the company was established in 2008. the person in charge said that in the early years, the steel trade was very good, and the profit per ton of steel could generally reach 300 yuan / ton - 500 yuan / ton, up to 1000 yuan / ton. however, with the increasingly fierce competition of overcapacity and homogeneity, and the acceleration of market informatization, the steel trade has declined sharply. in addition, the integrity incident of steel trade in 2012, the tightening of bank credit, the increasingly difficult steel trade, and the enterprise began a long way of transformation and exploration. it is revealed that since 2016, baoning iron and steel has basically eliminated market trade and equipment procurement, transformed its mainstream business into processing and distribution, and developed downstream end customers. its cash flow has also been significantly improved. in 2014, the company settled in cash. in 2015, it was gradually adjusted to the settlement method of cash plus receivables, and basically settled by receivables, so it must bear the account period risk of receivables. in addition, due to the adoption of appropriate risk management methods in the process of transformation, enterprises effectively avoid risks. "although the traditional trade is gradually reduced, the company's business is still developing healthily, and it still reserves the standing stock." baoning iron and steel head said.
after a long-term market exploration, baoning iron and steel has gradually formed a set of mature operation mode: first to meet the processing orders, the surplus part is used for trade sales, and the processing leftovers are sent to other final processing plants. in this way, there will be basically no overstocking of inventory, which can keep light or zero inventory, even if the price fluctuates violently, the risk is low. "our main processing is slitting and flattening, as well as sheet metal. in the past, it was outsourcing, i.e. after purchasing raw materials and plates, it was processed by the processing plant and then sold; now, after the transformation, it is a one-stop service for quality, delivery period, transportation and packaging, which is not only professional, but also convenient for management, with large profits. " "we have relatively little technological innovation, but the mode innovation is bigger," he said. "but the shortcoming is that the capital is still relatively tight, so we plan to develop" internet plus "vigorously. "if business transformation is to enhance the competitiveness and market viability of enterprises, then integration and reorganization is the general trend of market economy today." at the same time, the person in charge said that in his view, after 30 years of horse racing and enclosure, many industries and subdivisional industries have been in a state of full competition. if this state continues, it will enter the stage of merger and acquisition and industrial integration. one of the major characteristics of this stage is that financial capital will leverage the industry. downstream manufacturers turn to develop overseas markets. another private steel enterprise is ningbo yongfa group co., ltd., which is at the downstream end of the industry. as a leading domestic safe enterprise, the company has an annual sales volume of 1.2 billion yuan, more than 20 subsidiaries, its own processing plants, and sales outlets in the country, with a net profit of about 500-600 million yuan in 2015. the material is mainly made of sheet metal, including electronic panels, foam panels, etc.
it is understood that the company's sales network is mainly for the domestic market, and is currently preparing for the main board listing. however, in recent years, it has gradually turned to develop overseas markets, with the main target markets in europe, the united states and southeast asia. "we can survive the reform without fear of the so-called" game ". as long as we understand the market rules and the characteristics of the enterprise itself, we will be able to find a response strategy. " a person in charge of the company told the researchers that he enumerated the current favorable factors like a treasure: for the terminal manufacturers, although the decline of steel price plays an important role in reducing costs, it is not important yet, while the supply side structural reform has a significant positive impact on the industrial concentration, which will directly lead to the reduction of resource concentration and procurement costs; and de capacity and de inventory will reduce the pressure of terminal purchase; steel e-commerce will achieve a new transformation and development path for terminal manufacturers.
the person in charge said that the enterprise has also encountered difficulties in recent years. with the continuous decline of steel price, the cost of raw materials for production has declined significantly, but the cost of processing plants and labor costs are increasing day by day, making its production cost high for a long time and under great pressure. however, nearly half a year