As per the news from 21st Century Business Herald many downstream steel traders are mulling over regrouping under the M&A of steel enterprises in China
Analysts unveiled that the pusher behind that series of grouping is the mode change of trading, pricing, circulation and so on. Steel Chinese steel trading market is turning to be an e-business gradually.
Mr Li Wenjie GM from Shougang told reporters that there are several changes on Chinese steel sector during the past one year. Firstly, the management mode of steel trade has been changed. It is also possible to sustain losses even holding cashes and resources right now compared with past.
Mr Li noted that meanwhile the pricing basis of steelmakers becomes diversified. Taking information platform as a reference is most important for Shougang which can also control traders’ profitability level. He added that however steel producers are beyond control of traders’ sales price.
Mr Li said that besides, steel futures turns to be more and more important in China. Hence, it is quite difficult to judge price trend only according to the relation of supply and demand.
On the other hand, most Chinese steel enterprises are facing with disordered logistics, enhancing their steel cost as well as impacting their steel market prices. Fortunately, relative departments are establishing new regulations to solve such problems, He Liming, executive vice president of China Federation of Logistics & Purchasing announced at a forum on January 4th 2010.
Under such circumstance, lots of steel enterprises are struggling to construct professional trading platform and use advanced IT technology to fulfill rational collocation.