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Steel industry is getting into the most critical moment during the year

    Yesterday, Chengdu Evening News reporter visited some distribution company of the largest steel market – Longtan Temple Longgang Steel Market. Taking a stroll of the steel market’s each distributor’s warehouse, the reporter was only found two being loaded vehicles.

    Vendor: market price is upside down, making a small loss means earning

    Speaking of the steel business, the Chengdu’s sell Minister Ning Qiurong of the largest building materials solid steel company has a sad face. According to her saying, due to declining demand for steel,  the price has dropped, 95% of the steel dealers are at a loss. “Price changes day by day, even decline per ton up to $ 800.” Ning Qiurong analysis: “the main reason is that the market space has shrunk and the inversion of these has two factors. “

    According to Ning Qiurong introduction, construction steel distributor customers mainly are real estate and infrastructure, the former accounting for 60% of steel consumption. With the control of national policy, now real estate developers’s demand for steel tube declined by 30%. Infrastructure, the supply of the railway now have all stopped.

    The steel market getting small directly lead to the price war among distributors, not only cheap but also to fight advances in cash. Ningqiu Rong said his company’s annual sales has more than 40 million tons of steel, facing of today’s advances in cash also has pressure, small dealers is too much.

    Compared with the price war, leaving the dealer no alternative is “market upside down.” Ning Qiurong calculate to reporters: “level two 25 mm diameter  steel bar, the original purchase price is 4540 yuan / ton, and now sells for 4,500 yuan / ton. Business manager Liu Feng told reporters that the distribution chain of suppliers of funds are very tight. Without the ability to advances in cash have take on-demand procurement approach, not hoarding.

    Workers: wages cut by 40%

    According to the Southwest Warehouse Storage and Transportation master Liu said: “our wages directly link to the shipment quantity, average has about 2,000 yuan. Because it had shipped less for a few months, we at least got less 800 yuan per month. “Thus, local workers can barely maintain. However, foreign workers have to bear the cost of renting, they would rather choose to leave.

    Industry conditions: 90% steel companies had loss but did not dare cut steel production.

    Due to demand contraction, iron ore prices in November plunged more than 30 percent in October. According to industry insider, later November, despite the loss of iron and steel enterprises in October has improved compared with the situation, but still 90% of steel companies had losses. For production of every ton of steel pipe, the company lost a few hundred dollars, but did not dare cut production. In addition to recruitment difficulties, there are two reasons: the blast furnace once shutdown then the cost of resume production is very high; In addition, excess capacity market is very competitive, halted downstream customers will soon be loose.

    December the iron ore market is difficult to have good performance 

    Reporters noted that according to the price monitoring bureau in Sichuan Province’s latest data, from October, started the real estate project reducing, raw material prices reducing, steel prices reducing and other factors, steel prices have fallen.

    Commodity trading analyst’s record information of latest research report that, because the traditional industry is in the off-season, downstream demand is sluggish, capital return and a series of pressure-induced factors, iron ore market in December is expected to hardly have a good hard performance.

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