From the stainless steel pricing mechanism to see the status quo of the market pattern-turn (2007-12-20 09:33:54)Category: Stocks - From the stainless steel price-setting mechanism to see the status quo [Abstract] In recent years, China's stainless steel industry from the rise of the development of the speed of rapid development, the formation of Wuxi, Foshan, two of China's current even the The world's two largest stainless steel distribution market. Wuxi as an important industrial base in the middle of the Yangtze River Delta, because of the Ninghu Railway, Ninghu Expressway, 312 National Highway and the Beijing-Hangzhou Grand Canal is connected, the transportation is very convenient, so after the rapid development of Wuxi construction, chemical industry, textile, electronics, medical equipment, food machinery and other industries, the stainless steel industry in Wuxi has provided a broad space for the development of Wuxi, but also for the radiation of the national market has laid a solid foundation. At present, Wuxi formed for the Wuxi South Stainless Steel Market as the first, including Wuxi Jianghai East Road stainless steel type of market, Wuxi Daming Stainless Steel Market, Wuxi Oriental Steel City, including the combination of the four major markets into a comprehensive stainless steel market. With the accelerated pace of the stainless steel industry, the industry has formed some prominent contradictions, the most important of which lies in the buyer's market and the seller's market due to their differences in the formation of the antagonistic pattern, which is most obvious in the performance of the seller's market wantonly raise prices without regard to the buyer's market can afford the procurement costs, while the buyer's market also take the refusal of bulk purchases and the seller's market to fight against the high prices, which makes including Circulation market inventory increase, the buyer's market production blocked and the seller's market sales blocked the vicious circle of poor circulation of the industrial chain. This investigation report is based on the Wuxi stainless steel market, through the field visits, data analysis combined with the way, and strive to find out the current market supply and demand contradictions in the current situation, inquire about the root causes of the formation of contradictions, as well as through the global analysis of the method to make conclusions and give the relevant solutions to the countermeasures. [Body of the report] I. Wuxi stainless steel market supply and demand pattern of the current situation (a) the current situation of the supply side of the market Wuxi stainless steel market with its scale effect as well as superior geographic location affects China and even the world's stainless steel market, and is even known as China's stainless steel market of the "barometer". Although thousands of miles away from the Guangdong Foshan stainless steel market scale and geographic location is not less than the Wuxi stainless steel market, due to the local market product variety is not rich, the unspoken rules of the transaction for the "tax-free", coupled with the impact of informal customs import and export (smuggling), the market trading behavior norms than the Wuxi stainless steel market is poor, Wuxi stainless steel market is precisely due to the Tax policy, rich product variety occupies the absolute leadership position of driving slave China's stainless steel industry. It is in this advantageous condition, the market operating stainless steel trade merchants psychological advantageous position is also gradually formed, part of the financial strength of the stronger merchants began through the reckless price suppression to combat the financial strength of the weak merchants, through the "big fish eat small fish" form of competition to occupy the market share of sales. With the strength of the late enhancement, the market began to appear even if the buyer demand exists, the seller is also reluctant to sell the phenomenon, which is the industry called "sell" and "muffled". In the peak season of demand, the seller's market and even by recklessly raising the sales price to the buyer to increase the pressure to buy, the root of which is to wait for the upstream industrial chain stainless steel production of raw materials (such as nickel metal) prices, slow down the sales progress, waiting for the so-called high-priced timing of the shipment, which makes it difficult for some of the stainless steel demand for enterprises to withstand the constant deviation from the demand for artificially high prices, or lead to business shutdowns or induced the enterprise application for the evil situation of bankruptcy and closure. The evil situation of bankruptcy and closure. (B) the status quo of the buyer's market buyer's market as the last link in the industrial chain, including raw materials - steel mills - market - downstream, the purchase cost of raw materials by the price rise and fall The impact of the stainless steel manufacturers, by the ex-factory price of stainless steel, and finally by the market sellers of artificial pricing constraints, it can be said that not only the stainless steel industry, the buyer's market exists such a phenomenon. The seller's market and the buyer's market are interlocked, so the price of the market traders by the most obvious. It is in this mutual restraint role, in the market peak season, the buyer's market demand is strong, will be directly reflected in the number of products ordered to buy, which makes the market businessmen inventory is a large number of consumption, in this case, the stainless steel market traders will begin to alliance to raise the price, and the price is not only for the demand on the increase, but also take into account the fluctuation of raw material prices and steel mills ex-factory price changes, policies, and will also actively refer to the price of the stainless steel industry, and will also take into account the price of the stainless steel industry. Adjustment, but also actively refer to their own actual stock for price increases. In this case, the buyer's market, although strong demand for purchases, but the purchasing power has begun to decline, and even in the period of high market purchasing power of enterprises are unable to cope with high prices. In the actual investigation process, Wuxi Jinshenglu Information Information Co., Ltd, as a professional market analysis organization, confirmed this for us through some series of data. The most important raw material around the stainless steel price is metallic nickel, which is subject to the rapid development of the global stainless steel industry, and the increase in the scale of production capacity, and the demand for nickel has increased dramatically. In addition to increased demand, as the LME (London Metal Exchange), the main metal futures varieties, the fund of speculation has also continued to promote the rise in nickel prices, only 07 January to mid-May, the LME nickel prices have risen from $ 32,000 / ton to $ 51,000 / ton or so, or close to $ 20,000 / ton. In the market price of stainless steel, stainless steel circulation market, the main representative of the steel 304/2B 2.0MM coil, for example, the market price from the beginning of the 35,000 yuan / ton rose to 44,000 yuan / ton or so, an increase of nearly 10,000 yuan / ton. And such a price is only the average market selling price, in this case, the purchase cost pressure surged, the capital strength of the weak enterprises began to stop production or even bankruptcy. Although the recent nickel and stainless steel prices by the impact of weakening demand has fallen sharply, but by the shadow of the previous high prices, more buyers have taken a wait-and-see attitude with the attitude of the seller's market to do the fight, intended to seek to reduce the amount of purchases to report the "high price of revenge", which is also known as the industry "! Buy up not buy down" market phenomenon. Second, the Wuxi stainless steel market supply and demand status quo formation of the reasons through the field visits we found that the current Wuxi stainless steel market, most of the merchants hold a steel agent qualification, it should be noted that, stainless steel agent qualification pre-establishment of the agents mainly for the geographical location, such as TISCO to give a business in the East China market agent qualification, with the rapid development of the stainless steel industry, the scale of production capacity Continuously improve, the steel mill found a single reliance on a regional or some agents have been unable to adapt to their own output, so the later began to dealers for the number of orders given to the number of agents of the qualification, which makes the original by a small number of regional agents in control of the market mechanism began to disintegrate, the number of orders on the agent began to gradually increase. We found that the upstream steel mills are still not satisfied with the number of orders on the size of the agents, began to divide the agents through the product category, which makes the current Wuxi stainless steel market agents in both the number of enterprises and the diversity of products surged. After the formation of the agent mechanism, the supply side of the market is also growing, "big fish eat small fish" market competition is also more incentives, in the middle of this began to appear a few big agents, such as Wuxi Daming Metal Materials Co. Such as South Korea's POSCO, Japan's Nippon Gold Industry and other well-known stainless steel producers of domestic agents, in control of the absolute number of resources as well as the advantages of diversification, and so on, several large agents began to control the market alliance, the monopoly of the supply side of the market began to form. Thereafter, the market pricing is not in the traders with reference to their own inventories or nickel price changes, more to a few large agents of the alliance price as a reference, so that pricing began to deviate from the buyer's market decided by the laws of the economy. In the buyer's market demand season, the market price will not necessarily rise, on the contrary, the big agents in the process of competition with each other may wantonly suppress the price to weaken the competitiveness of rivals, for the market understanding and analytical ability of the poor buyer's market, they only know what kind of materials need to be purchased for such market internal market is difficult to understand the whole picture, and therefore some times mistakenly believe that the price of the later will still be Down, so under the influence of the "buy up, not buy down" mentality, procurement is hesitant. After the agents ate into each other's inventory by suppressing each other's prices, a winning agent began to raise the market price, resulting in the price of stainless steel all the way up later, when the buyer to follow up on the buyer to know that they are the agents of the competition by the teaser, but in order to maintain the production and shall not be hard to purchase.
It is in this kind of market competition mechanism as well as the potential rules, the agent holds the absolute right to say the price, and even in some cases, a few big agents can reduce the order quantity to force the upstream steel mills to cut down production, so as to influence the world price of nickel metal. The buyer's market since then began to purchase to maintain enough vigilance, for the market price of the decline in trust, some of the big buyers began to set up their own price analysis institutions, for the changes in the market to make their own analysis, rather than just believe in the agent's one-sided statement. After the strengthening of this distrust relationship, the current supply side and the buyer's antagonistic pattern began to form. Third, the Wuxi stainless steel market supply and demand side of the problem by visiting the survey, we will be both sides of the problem focusing on the domestic stainless steel market agent system shortcomings. It is understood that at present, in addition to the agents have the right to prioritize the pickup, the steel mills will be given to the agents in the ex-factory price of the downward fluctuation of the preferential, which is for small agents or ordinary dealers can not enjoy. For example, in September, the mainstream stainless steel products 304/2B 2.0MM coil ex-factory price of 32400 yuan / ton, agents enjoy a floating 600 yuan / ton ordering preferences. In addition, if the order 1,000 tons and is a full one-time payment will continue to enjoy the 200 yuan / ton discount, which can be seen, the agents in the ordering preferences will have enjoyed the 800 yuan / ton discount. It is with such preferences, the agent's price itself already has the competitive advantage of low ordering costs. After the agent's price is determined, other dealers from its order is not given in accordance with the factory price, but in the agent to re-establish the sales price as the basis. Therefore, it can be said that the ordinary dealer's ordering costs on the increase, in fact, but also disguised to promote the overall market price increases. Traders in order to reduce costs, only through the late price increases, and therefore little consideration of the actual needs of the buyer's market. And it is with such an agent system and the extension of the pricing system, the buyer's market purchasing cost pressure is also invariably increased. Although the buyer's market knows that this nearly 1000 yuan / ton discount has been swallowed by the agent, but still forced to accept the agent in accordance with the ex-factory price markup pricing, which to a certain extent makes the two sides for the price of the trust has disappeared. Therefore, the current buyer's market began to establish a purchasing alliance to jointly resist the rise in agent prices, mainly manifested in the centralized non-purchasing behavior, which led to the market resource circulation obstacles, triggered by the market, including the inventory continues to increase, the steel mills were forced to cut production as well as reduce the procurement of nickel, which ultimately led to the decline in global nickel prices to trigger the decline in global stainless steel prices. Therefore, it is analyzed that the formation of the buyer and seller market confrontation situation is ostensibly in the price for the development of the degree of trust, in fact, lies in the two sides for the existence of the agent system has a very big difference. Fourth, improve the Wuxi stainless steel market industry chain suggestions through the Wuxi stainless steel market for the current existence of the analysis of the agent problem, as well as the resulting confrontation. With reference to the development of foreign stainless steel industry, we propose to introduce in the Chinese stainless steel industry chain in Europe is more prevalent in the "alloy surcharge system". Stainless steel "alloy surcharge system" is divided into two parts, is composed of stainless steel base price system and alloy surcharge system. Stainless steel industry abroad, the stainless steel base price is the stainless steel producers in accordance with the market supply and demand reality and their own production costs calculated prices, this price is generally not change; alloy surcharge is in accordance with the production of stainless steel, such as chromium, nickel, etc., in accordance with the main raw materials, in accordance with the changes in their prices through a certain method of calculation. Through the above can be clearly seen, the base price reflects the market demand, that is, reflecting the demand changes in the buyer's market. Because the peak season of stainless steel demand is generally concentrated in the first, second and fourth quarter (the third quarter is the off-season demand, mainly taking into account the arrival of summer when the foreign stainless steel market has the habit of summer break), so generally is not a big change. The alloy surcharge is based on the fluctuations in raw material prices developed, and have a prescribed formula, so there is a "stainless steel price = base price + alloy surcharge" equation. In addition, it should be pointed out that the stainless steel producers in foreign markets generally have their own processing centers and sellers, processing centers and sellers generally have their own shares in the stainless steel plant, so their sales are only in the sales volume of the commission, and the price is strictly enforced alloy surcharge system. We will alloy surcharge and China's agent system is compared as follows: differences between the comparison of domestic agent system foreign alloy surcharge system clarity of steel pricing only a single ex-factory price list public, the specific calculation method is not open combined with market demand and their own cost accounting, reference to the price changes in the calculation of the main raw materials, algorithms, transparent and fair sales pricing clarity of the agent to artificially control the pricing. Steel mills do not intervene in the base price does not change, according to changes in nickel and other metal price fluctuations, less human intervention in the actual price reference deviation from the demand, high water, a single period of data reference role is not based on demand, based on raw material price fluctuations, credibility from the above we can see that the solution to the current Wuxi stainless steel market, and even China's stainless steel industry in the existence of supply and demand side of the confrontation of the contradictions and the introduction of the active "Alloy surcharge system" can be steel mills, market price clarity, easy to monitor, can effectively increase the supply and demand sides of the price of trust. [Conclusion] According to the actual situation of the stainless steel market in Wuxi, combined with the views of some analysts, with reference to the implementation of foreign "alloy surcharge system" effect, that one of the effective ways to solve the current conflicts lies in the positive introduction of the system. However, in the field visits we found that China's stainless steel agency system has existed for decades, and by the relevant industry agents system is y rooted in the influence of traders are reluctant to give the right to speak the price of the buyer's market, the upstream steel mills are more reluctant to easily make the price of the formulation of the clear, and the state-owned enterprises, including Shanxi TISCO, Shanghai Baosteel, has always been a monopoly of the industry's color, and therefore the "alloy surcharge system". The implementation of the "alloy surcharge system" will be difficult. At the same time, we found that at present, including the market dealers and the downstream buyer market for the current price monopoly has been quite complaining about the formulation of the industry has been more and more people began to criticize the shortcomings of the agent system, calling for the implementation of the "alloy surcharge", we believe that the superior system to replace the agent system will only be time! Question! Note: Recently held a meeting of major domestic stainless steel mills to discuss the introduction of alloy surcharge mechanism for domestic steel mills, and the mechanism may be formally introduced in January 2008. Alloy surcharge in the Chinese industry has been mentioned more than once, since 2006, nickel prices have risen sharply making the domestic stainless steel production enterprises effectively feel the cost pressure brought about by rising raw material prices, the domestic major stainless steel mills have been set up one after another; alloy surcharge system research group, to study the real ways to avoid the risk of raw material increases.