Iron and Steel Industry Prices Fell, the Reason Why?

As we all know, often drop large iron and steel industry, the price is extremely unstable, so what is the cause of this phenomenon?Shinestar Steel Research Institute found through research, technology and the characteristics of the iron and steel industry, the cost structure resulted in the imbalance between supply and demand environment quantity adjustment special difficulties.

Specifically, the characteristics of modern steel production technology determines that the industry has a strong scale effect.This means that the iron and steel enterprises need to spend a huge amount of money to buy equipment and equipment to build production systems, resulting in a higher proportion of fixed capital amortization of depreciation in the total cost.Shinestar Steel Group attaches great importance to R & D investment, its R & D production of carbon steel pipe, welded steel pipe, line pipe, galvanized pipe and other excellent products, the market was highly recognized.

Under normal market conditions, the characteristics of the industry makes the steel enterprises with the average cost per unit of output with the output scale and reduce the advantages, is conducive to enhancing the competitiveness of enterprises by expanding the scale, so the rapid growth in market demand under the environment of enterprises with strong expansion impulse.However, the demand for reverse change and under the conditions of excess capacity, the objective needs of sales compensation huge cost sharing, will lead to reduced production enterprises facing special difficulties,makes an ordinary enterprise may have to accept the price is far below the average cost, the formation of the iron and steel industry seems to be more willing to price competition and regardless of the loss of the phenomenon.

At present, the entire industry is under the background of the capacity to understand the difficulties behind the steel enterprises are more conducive to the promotion of structural adjustment.Huge amortization cost constraints, in addition to the mentioned steel blast furnace if stewing furnace boiler stop need extra pay huge cost, which further increased the steel mills production scale down the economic difficulties.In addition, the government protection measures from the Angle of system distortion may prevent enterprises from the number and scale down.

Requires industry to face the question is: in 2009, 460 million tons of crude steel production in China, in 2015 the actual production capacity of more than 1.25 billion tons of crude steel in our country, production of 804 million tons.By profit nature of the enterprise, industry concentration degree increase, corporate profitability increased, the influx of capital, capacity expansion again, a single merger can not limit production capacity expansion.

Product navigation, production escort,Shinestar Steel Group has been very focused on product development and production, which owns the layout of Changsha, Xiangyin, Nanchang, Tianjin four production bases,combined shinestar steel R & D and production of the powerful platform, R & D and production of carbon steel pipe, welded steel pipe, line pipe, galvanized pipe and other excellent products, praised by customers.The future, Shinestar will continue to increase investment, the introduction of advanced technology and equipment, the more the production of more and better quality products, in order to adapt to the development of the globalization strategy.