Steel trading companies in South China have reduced their inventory

South China is one of the regions with the largest demand for steel in the country, but there are few steel mills in the country, and many private steel trading companies of various sizes gather here, becoming a very important market participant in the steel industry chain. In order to understand the actual situation of the steel trade enterprises in the global economic environment, recently, the reporter of the ** Daily reportedly investigated some steel trade markets, steel trade enterprises and ports in South China.

Wholesale markets, piers deserted

In December, Foshan Lecong steel market has not seen the busy scene in the past. Various steel trading companies throughout the market are very deserted, and some have closed down. The Lecong steel market covers an area of ​​2.2 million square meters, with more than 2,000 steel traders and more than 30,000 employees. The Lecong steel market has annual steel trade volume exceeding 20 million tons, which exceeds one-third of the total sales volume of steel products in Guangdong Province. It is the largest and world-renowned steel trade distribution center in the country.

Steel trading companies have had a hard time this year, especially after the sharp drop in steel prices in October. Jun Jianquan, general manager of Foshan Junhaoxuan Trading Co., Ltd., said: “This year steel companies generally suffer losses, with less market demand and less trading volume. The company is now mainly doing a capital-preservation business. There is no profit at all.” Under his office, A nearly 80-meter-long warehouse contains hot rolled coils for sale.

In addition, the reduction of the volume of goods from the port terminal can also see the deserted market. At the Yuzhu Steel Logistics Base in Guangzhou, dock stevedores told reporters that compared to previous years, the number of steels arriving in Hong Kong this year has decreased a lot. Among them, the volume of cold rolled coils and strips has been reduced most. Since wage calculations are tied to the number of loading and unloading parts, their monthly income has fallen by almost half compared to the best of 2009. The reporter saw in the field investigation that there were constantly trucks going in and out of Yuzhu Dock. The person in charge of the base told reporters that some projects in southern China are still rushing ahead of the Spring Festival, especially during the afternoon, and the pier is still in the evening. Not too lonely. However, compared with the upsurge of more than 500 trucks per day in 2009, only about 200 trucks are entering and leaving the city every day, which is already worse than in previous years.

Steel trade companies to minimize inventory

“We have just finished rebar in Yuzhu Ferry Terminal in Guangzhou and are not ready to restock.” Mr. Yang, an agent of Shaogang Group in Foshan, told reporters. In previous years, because the construction site was to be started after the year, the steel trade enterprises would increase their inventory before the year. However, this year's situation was not good, and there were no bullish factors in the market and policies. Therefore, steel trading companies are reducing inventory. "You can go home early this year to celebrate the New Year!" said Mr. Yang.

Guangdong Shengang Trading Company is a large-scale steel trading company in South China with an annual trade volume of approximately 500,000 tons. Company officials revealed to reporters that the company's inventory is only 10,000 tons, only one-third of the same period last year. He said that the reason why the company is still stocking is mainly based on expectations of future demand, but is not optimistic about short-term demand.

“Before the Spring Festival, we will mainly observe and wait, we will not make up stocks, and we will not prepare stocks through the ** market. After the Spring Festival, we will adjust the stocks according to the price.” Although the current price of rebar in Guangdong reaches RMB 4,700/ton, which is higher than Shanghai RMB 4500/ton and RMB 4200/ton in Beijing, and the relative price is still in the premium status, but the rebar shipments from northern steel mills such as Lianyungang at Yuzhu Ferry are not as much as expected. Guangdong’s steel trade Enterprises do not dare to purchase large quantities. "On the one hand, the difference between 400-500 yuan / ton, minus the cost of transport may not have much left, the more important thing is that after the Spring Festival consumption is still not good, and the current cost of capital is also relatively high." Yuzhu dock related The person in charge told the reporter.

According to Wang Pengfeng, China International Steel Research Department, due to the global systemic risks, the steel market is not confident enough, upstream steel production has been reduced, and downstream demand is not strong. Steel trading companies or agents reduce inventory, and now more is the need to reduce risk and reduce losses.