Iron And Steel Prices Rise All The Way, Shoe Making Machinery Enterprises Should Have Laws.

The rising price of raw materials has already greatly reduced the profits of enterprises. At present, the price rise of steel is soaring all the way. This is a great pressure on machinery enterprises, such as shoe machines, leather machines and so on, whose main raw materials are iron and steel.

How to deal with it?

How can we innovate technology and prevent risks?

It is a matter of concern to the industry.

Market demand is getting higher and higher. Raw materials price rises "pouring oil" as hot summer days, and steel prices are heating up all the way.

In the first 5 months of this year, steel prices rose by 30%, and steel prices in May increased by nearly 40% compared with the same period last year.

Iron and steel is one of the most important basic building materials. The rise in steel prices has taken the lead. Many industries such as construction machinery, shipbuilding, automobiles, household appliances and so on are all affected by them. These downstream industries are under great pressure on the rise of steel prices.

"In this round, steel prices have gone up quite fiercely."

Wang Yongsheng, deputy general manager of Shandong Taishan iron and Steel Group, said.

In May this year, the price of hot rolled broadband steel produced by Taishan Iron and steel company was 5800 yuan to 5900 yuan / ton, compared with 4200 yuan to 4300 yuan / ton in the same period last year, rising nearly 38% compared with the same period last year. The cold rolled thin broadband produced by Thai iron and steel company and the price in May increased by nearly 35%.

Tae steel sales department official said that constantly adjusting the factory price has become a major event in the first half of Tai Steel.

In February this year, mineral company of Brazil vale announced its international iron ore benchmark price in 2008, which was reached by Nippon Steel, Pohang, Korea and Thyssen Krupp.

The offshore price of tonne iron ore in southern Brazil increased from $46.87 last year to US $77.37, while the high-grade grade of La gas increased from $49.12 to US $83.99, or 65% and 71% respectively.

The price rise of iron ore has been the sixth time since 2003, and the increase is close to the historical high point, next only to the 71.5% increase in 2005.

For China's steel mills, a slight change in international iron ore prices will touch their sensitive nerves.

China Iron and Steel Association data show that in 2007, China's iron and steel plant imported 3.83 million tons of iron ore, accounting for more than half of the required iron ore.

The international iron ore prices have gone up so high that the major steel mills have to take the initiative to deal with them, and price increases are inevitable.

Although the price rise of raw materials has directly led to the rise in steel prices, the "internal fire" of market demand is the fundamental reason for the rise in steel prices.

Zhang Jiaxin, deputy general manager of Ji'nan iron and Steel Group Corporation, said that the demand for steel in the international and domestic markets is very strong at present. This has led to a rise in steel prices, but there is still market backing and no buyers.

"A simple increase in cost will certainly pull steel prices, but it will only work in a certain period of time, and it is impossible to achieve the current level."

Zhou Xizeng, chief analyst of CITIC Securities and iron and steel industry, also holds the same view.

He believes that China's industrialization and urbanization process is in the ascendant, and the demand for steel will only increase, which will lead to high steel prices.

In fact, as an intermediate product, the steel industry has been growing faster than the downstream industry in recent years.

Downstream industries such as real estate, machinery manufacturing and automobiles grew by about 20%-30% last year, while steel growth in the same period was only 18%, and in January this year it was as low as 7%.

Obviously, the market is desperate for steel products.

Zhang Jinong, senior economist of Laiwu iron and Steel Group, believes that at present, steel is in short supply.

And iron ore, coke and other raw materials substantially increased prices, just played the role of "pouring oil", magnified the original price effect should arise, so that the rise in steel prices performance is more prominent.

Several joys and worries, steel prices rise, so that iron and steel as the main raw material enterprises feel tremendous pressure.

Most of the sale objects of downstream enterprises are consumers. Because of the large elasticity of product market demand, these enterprises do not dare to raise product prices easily.

Facing the double pressure of iron and steel factories and markets, downstream enterprises often face the embarrassment of "rising or not rising".

Wang Xingxin, chief accountant of Linyi Huasheng Zhongtian company, believes that because the market demand is still strong at present, it will not affect the sales of enterprises at any time because of the price increase, but the high price will bring potential risks to the sales of the enterprises. Once the market fails to support them, the enterprises will not escape.

The problems faced by downstream enterprises are more than that.

"The price rises alone, but the key is that it is difficult to buy Steel now, which has caused great difficulties for enterprise production."

Liu Hanzhi, general manager of Laiwu global auto parts company, said.

According to him, at present, the company's normal demand for steel is 1000 tons - 1200 tons / month, but only 700 tons per month - 800 tons per month.

It is estimated that there will be another 200 tonnes reduction in June, which is more worrying than price increases.

The rise in steel prices and sales will naturally help increase the total profit of enterprises.

But at present, the pace of steel price rise has not kept up with the price rise of raw materials, and the profit margins of enterprises are gradually decreasing.

It is understood that in May of this year, iron ore, coke and other raw materials rose by 100% year-on-year, while the increase of steel was about 40%, and the profit margins of tonne steel were indeed continuously compressed.

At present, most steel mills require downstream enterprises to pay cash in the purchase of steel products in order to ease financial pressure.

At present, the manufacturers of iron and steel and the iron and steel enterprises agree that the price of iron and steel is rising, and the raw materials enterprises benefit most and make the most profit.

For this, raw material enterprises do not deny.

"The cost of mining iron ore is about 500 yuan per ton," said Ma Tianfu, senior political Engineer at the Shandong mining and mining group. "The cost has not changed for several years. Considering that the price of the iron ore spot market is now about 1760 yuan / ton, it can make a profit of 1260 yuan per ton."

Innovative technology and risk prevention, steel downstream enterprises feel the most obvious pressure on rising prices, and their reaction is the fastest.

In the face of a series of problems caused by the rise in steel prices, manufacturers are making every effort to deal with it.

The first is to adjust the purchasing mode and minimize the direct pressure brought by the cost increase.

Since March of this year, Laiwu global automotive parts company has begun to purchase "fixed size" steel products, purchasing according to the exact size required for production, and avoiding unnecessary waste. The Taishan iron and Steel Group is now upgrading the stock of plateau materials and keeping 200 thousand tons of coke inventory per month, so as to avoid the losses caused by the rapid increase in coke prices.

Improve production technology and optimize product mix.

In order to increase the profit margin of products, Shandong has increased the production of 50 products since the beginning of this year, limiting the production of 30 models, because the profit rate of the 50 models is even higher; and Laigang is gradually adjusting its product direction, reducing the production of construction steel, developing the steel for production, and improving its profit margins.

For the future trend of steel prices, most enterprises hold a bullish attitude.

Especially in the Wenchuan earthquake, 11 cities and prefectures in Sichuan province were affected. Most of the houses collapsed in the worst hit areas.

Large scale construction and maintenance of housing in the short term will greatly increase local demand for construction steel.