(source: Langer viewpoint)

Speaking of Chinas stainless steel market, we first think of Wuxi market in the north and Foshan market in the south, because these two places are the core representatives of the domestic stainless steel circulation market. However, the rapid increase in the scale of domestic stainless steel production and sales in recent years has not led to a sharp increase in the transaction scale and popularity of the stainless steel market in the two places, but a slight drop compared with the peak period of previous years. What is the reason for this?

1、 The proportion of direct supply of steel mills has increased, forcing the traditional trade to go farther and farther

In order to further enhance the dominance of steel mills to the market and users, mainstream steel mills further sink many stainless steel downstream industries and make direct contact with end customers. At present, the proportion of direct supply of large state-owned and joint venture factories has increased to 50% - 70%, and the proportion of direct supply of private steel mills has also increased from the original 5% - 20% to 20% - 50%. The continuous increase in the proportion of direct supply of steel mills forces the traditional traders in the market to go further and further.



2、 Strengthen the sales of rolling plates, reduce ineffective circulation, and gradually reduce the transfer circulation in the market

A few years ago, most of the resources of Qingshan and Delong were first put into the markets of Wuxi and Foshan, and then circulated throughout the country through trade. With the gradual cultivation of Qingshan and Delong agents all over the country in recent years, the volume of steel plant resources directly circulating to all parts of the country has increased, while the volume of simple and crude agents in Wuxi and Foshan markets has gradually decreased.

In 2020, Qingshan and Delong successively issued policies to require their agents to reduce the circulation of invalid stainless steel coil trade and strengthen plate opening sales to targeted end customers. The leading effect of Qingshan and Delong has led the domestic mainstream steel mills to continue to increase the terminal investment, reduce the investment in the trade market, and strengthen the advance of local precision inventory. The shipment volume of the steel plants agent flat plate has increased month by month, distributing more resources of public warehouses and the gathering of market popularity.



3、 The pattern of regionalization has taken shape, and the industrial chain has formed a closed loop

The stock scale of the Industrial Park continues to expand, and new projects come one after another. The raw materials in the park form an integrated supply and digestion, and the upper and lower industrial chains form an effective closed loop. There is no need to transfer resources through the two markets of Wuxi and Foshan. At present, Fujian Qingshan Industrial Park, Yangjiang Guangqing Industrial Park, Taiyuan industrial park of TISCO, Linyi Stainless Steel Industrial Park, etc., as well as Xiangshui Delong Stainless Steel Industrial Park and Qingshan Jingjiang stainless steel industrial park have been formed. In the face of the vigorous development of industrial parks across the country, traditional trade is gradually moving away, and xinliutong is moving forward with great strides.

4、 Processing + warehousing are rising all over the country, and offline circulation is transformed into shape

The stainless steel circulation market has entered the era of low profit. Agents relying solely on trade have faced the test of the survival crisis of the industry, and have been gradually replaced by large and medium-sized processing trade distribution centers. Some single trade groups with weak comprehensive competitiveness or no self generated differentiation advantages have disappeared in the vast stainless steel market.

In 2019, the viaduct near the Oriental market collapsed and overturned, which not only led to poor traffic congestion in and out of the market, but also significantly increased the cost of short barges in and out of the market. The trade warehouse of Qingshan system was relocated to Jiangyin wharf to reduce the transfer cost from wharf to market. Supporting various processing equipment to reduce the short barge cost between processing plants. With the leading role of Castle Peak, other steel mills have followed suit in a certain proportion, resulting in the reduction of transfer scale in the core market and the gradual swallowing of popularity.



5、 With the rise of online futures + Internet, the circulation of new fields has made great strides forward

On September 25, 2019, stainless steel futures of the previous stock exchange were listed, and many domestic futures companies began to participate in stainless steel futures trading. At the same time, many futures companies began to set up "futures and spot sales business". With the increase of resource circulation volume and popularity of futures companies in the field of stainless steel in recent two years, it means that the circulation in new fields is moving forward with great strides. Steel mills split the original simple "spot + offline futures" trading into multi-channel operation through online platforms such as Shanghai plate and Wuxi plate, which will virtually reduce the trading volume and market popularity of the two traditional markets of Wuxi and Foshan.

With the continuous maturity of Internet technology and peoples gradual recognition of online shopping goods, its fast, convenient and strong controllability are very popular with current users, especially for small and medium-sized users who have no negotiation capital, which has brought good news and solved the problem of having steel factory quality assurance certificate and small quantity. Therefore, there have been the rise and growth of many stainless steel online platforms, The trading volume of traditional trading agents and the popularity of the two markets in SiVo are divided.



With the further increase of the proportion of direct supply of steel mills, the invalid circulation is gradually reduced, the regionalization pattern is formed, processing + warehousing is rising everywhere, online futures + Internet is moving forward, the traditional trade of stainless steel is gradually moving away, and the new ecology has been transformed and formed.