Industry new
The profit of stainless steel industry shrinks
I. The shrinkage of profits in the stainless steel industry and its causes
The rapid development of the Internet and the e-commerce platform evolved from it, is changing the traditional "one to one" transaction model. So far, before this "one to many" (a buyer to multiple sellers, the buyer accounted for The form of oligopolistic advantages has also gradually been replaced by a "many-to-many" (multiple-buyer and seller cross-cutting) transaction model. In recent years, stainless steel production capacity has grown rapidly. Participants and investors in the industrial chain have also been influxed. However, since the development of the domestic stainless steel industry, the industry’s profits have gradually shrunk and the industry has faced bottlenecks. This is mainly due to the following reasons: :
1. Increasing market participants, and the entire stainless steel industry's normative system is not completely determined, especially the lack of a unified reference standard for the formulation of prices, and companies often have the tendency to depress price vicious competition.
2. Although China's stainless steel production capacity continues to grow and it has reached the highest level in the world, raw materials, especially nickel prices, are sold abroad. No matter whether China’s stainless steel manufacturing companies or trading companies are subject to the risks of international raw material price fluctuations.
3. With the rapid and convenient information transfer, the market price is gradually transparent, both buyers and sellers have mastered the price, so there is no "dark profit" caused by information asymmetry. On the other hand, the operating costs of the stainless steel industry are increasing. The support needs a huge capital flow, and the pressure for the survival of the central enterprises is constantly deteriorating in the ever-changing macro-control. The decline in the profit rate of the stainless steel industry has become an indisputable fact.
In terms of operating costs, it is mainly reflected in the increase in labor costs, borrowing costs, logistics costs, and management, sales, and financial costs. Stainless steel sales profits have dropped to a low point. In addition, there is a liquidity risk is relatively large and difficult to measure, mainly because the current stainless steel prices can not be controlled, in particular, the decline in the market is often a sharp drop, to stainless steel 304 since March this year, cold rolling In terms of market conditions, the world in just over two months has dropped from RMB 27,200/ton to RMB 22,200/ton. Many traders have not had time to control risks. High-cost resources have kept suppressing inventory, and they have only recently eased with better conditions. But the costs are already difficult to calculate.
If you have to calculate the operating costs, first use a rough calculation of a trader, according to the current situation, regardless of the market downside risk, a ton of stainless steel at least 200 yuan in gross profit margin to talk about the "may be rich Earn, if there is a decline in inventory, it is very likely that the so-called profits earned over the last six months will be completely eliminated in a month.
For the profits of the stainless steel industry, the data from the upstream steel mills are roughly estimated. Taking Taigang Stainless, the largest stainless steel company in China, as an example, according to the disclosed financial statements, the gross profit of stainless cold-rolled sheet and other stainless steel business in 2005 was 7.21% and 5.04% respectively. In 2006, it increased to 13.31% respectively. And 10.96%, by 2007, there has been a slight drop to 10.76 and 9.77% (see Table 1). It can be seen that before the outbreak of the financial crisis in 2008, the average gross profit of the enterprise could basically be maintained at around 10%. Overall, it was relatively good. However, since the financial crisis broke out, the profit margin almost bid farewell to the "10" era, the 2008 enterprise. Gross profit was only 5.59%, which was almost half of that in 2007. Although it increased in 2009 and 2010, gross margins also approached 10%. However, before the financial crisis, the increase in stainless steel margin was mainly due to output. Promote effect. In 2005, Taigang’s stainless output was only about 800,000 tons. In 2010, it reached about 2.5 million tons, the output increased by 212.5%, and the gross profit did not exceed 10%. The increase in the cost of financial taxes offset the costs of some companies. Net profit.
Table 1 Mauritic stainless steel in recent years
Year Cold rolled sheet metal profit (%) Other stainless business gross profit (%)
2005 7.21 5.04
2006 13.31 10.96
2007 10.76 9.77
2008 5.59 -
2009 8.61 -
2010 9.79 -
The profit rate of the largest stainless steel production enterprises is still the same, and the enterprises in the trade sector are even more vulnerable. As we all know, traders are more attached to steel mills because steel mills, as production companies, control the lifeblood of resources and are the food and clothing parents of trading companies. The profits of steel companies can only be maintained in such a position. It is conceivable that the profits left by traders will be reaped. How much can there be? Especially at present, private steel mills such as Taishan Iron and Steel and Dongfang Special Steel are participating in the market and competition is fiercer. Many traders are flooding into the market to seize and divide up the user market. In addition to fighting for some products, steel mills are trying to avoid lengthening the industry chain. The risk of profit loss is also very happy to expand user channels. It is expected that the center of gravity in the future will be gradually tilted towards users. Therefore, at this stage, steel mills must have a balance between end users and traders.
Second, the development direction of stainless steel trading enterprises
For the stainless steel industry, whether it is steel enterprises or trading companies, not only does the problem of shrinking profits, but also the need to rethink development issues, especially the trading companies may be facing the pain of transformation. Following the scale of the stainless steel traders, Li Xiaoxia, a research fellow at Fubao Stainless Steel R&D Department, puts forward some practical suggestions for the development direction of the trading companies:
Some large-scale trading companies have relatively complete delivery and sales channels, but these are all basic businesses. After doing a relatively good job, they should consider the transformation of the higher-end stainless steel business services and develop customized services for stainless steel demanders. For example, to create integrated processing platforms such as stainless steel shearing, surface treatment, molding, machining, and parts manufacturing, and to improve the distribution service system and transition to service-oriented manufacturers. Even the same as Wuxi Daming Metal, consider listing financing, speed up the capital turnover, expand the visibility, and seek a bigger platform for development.
Medium-sized enterprises should be clear about their own advantages and turn to professional development, such as franchise 200 series, franchise hot rolling, or franchising a steel mill product, but do not forget to form cohesion, mutual understanding and resource sharing with other peers in the market. In mutual help and assistance, efforts are made to develop and win together.
Small businesses are currently mainly within the market, relying on fluctuations in the market and earning a difference in the way they operate. This model, commonly known as “moving bricks” in the market, is difficult to grasp the market's rise and fall, relying on speculation in the business, and its profits are difficult to grasp. If there is no sense of urgency and efforts to seek sustainable development, it is difficult to fluctuate. In such a fast market, it will survive for a long time.
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