Looking at the current situation of the market structure from the perspective of stainless steel pricing mechanism-turn (2007- 12-20 09:33:54) Classification: Stock-Looking at the current situation of the market from the perspective of stainless steel pricing mechanism [Abstract] In recent years, China's stainless steel industry has developed rapidly from the rise, forming Wuxi and Foshan, the two largest stainless steel distribution markets in China and even in the world. Wuxi, as an important industrial base in the middle of the Yangtze River Delta, is connected by Nanjing-Shanghai Railway, Nanjing-Shanghai Expressway, National Highway 3 12 and Beijing-Hangzhou Grand Canal, with very convenient transportation. Therefore, through the rapid development of Wuxi's construction, chemical industry, textile, electronics, medical equipment, food machinery and other industries, it has provided a broad development space for Wuxi's stainless steel industry and laid a solid foundation for radiating the national market. At present, Wuxi has formed a comprehensive stainless steel market composed of four market portfolio cities: Wuxi Jianghai East Road Stainless Steel Talent Market, Wuxi Daming Stainless Steel Market and Wuxi Oriental Steel City. With the accelerated development of stainless steel industry, some prominent contradictions have formed in the industry, the most important of which is the antagonistic pattern formed by the differences between the buyer's market and the seller's market. The most obvious performance is that the seller's market arbitrarily raises prices without considering the purchasing cost that the buyer's market can bear. At the same time, the buyer's market also refused to buy in bulk to compete with the seller at high prices, which made the circulation of the industrial chain not smooth, including the increase of inventory in the circulation market, the production in the buyer's market was blocked, and the sales in the seller's market were blocked. Based on the stainless steel market in Wuxi, this investigation report tries to find out the contradiction between the supply and demand sides of the market through the method of overall analysis, explore the root causes of the contradiction, draw conclusions and give relevant solutions. [Text of the report] I. Current situation of supply and demand pattern of Wuxi stainless steel market (I. Current situation of supplier market) Wuxi stainless steel market affects the stainless steel market in China and even the world with its scale effect and superior geographical location, and is even called the "barometer" of China stainless steel market. Although the scale and geographical location of the stainless steel market in Foshan, Guangdong Province, which is thousands of miles away, is no less than that of Wuxi Stainless Steel Market, due to the lack of rich products in the local market, the hidden rule of trading is "tax exemption", and the influence of illegal import and export (smuggling), the market trading behavior is even worse than that of Wuxi Stainless Steel Market, which occupies an absolute leading position in the national stainless steel industry because of its comprehensive tax policy and rich products. It is under this favorable condition that the merchants engaged in stainless steel trade have gradually formed their psychological advantages in the market. Some businesses with strong financial strength began to crack down on those with weak financial strength by slashing prices, and occupied the market share through the competition form of "Big Fish eat small fish". With the strengthening of strength in the later period, the phenomenon that the seller is unwilling to sell even if the buyer has demand began to appear in the market, which is called "property hoarding" and "over-selling" in the industry. In the peak demand season, the seller's market even increases the buyer's buying pressure by arbitrarily raising the selling price. It simply wants to wait for the price of raw materials for stainless steel production (such as metal nickel) in the upstream of the industrial chain to rise, slow down the sales progress, and wait for the so-called high-priced opportunity to ship, which makes it difficult for some stainless steel demand enterprises to bear the inflated price that constantly deviates from the demand, or leads to the suspension of production or induces enterprises to file for bankruptcy. (II) The current situation of the buyer's market As the last link of the industrial chain including raw materials, steel mills, markets and downstream, the purchasing cost of the buyer's market is affected by the fluctuation of raw material prices, ex-factory prices of stainless steel manufacturers and artificial pricing of sellers in the final market. It can be said that this phenomenon not only exists in the buyer's market of stainless steel industry. The seller's market is closely related to the buyer's market, so it is most obviously affected by the price of market traders. It is under such mutual constraints that when the market peak season comes, the demand in the buyer's market is strong, which will be directly reflected in the purchase volume of product orders, which will make the inventory of market merchants be consumed in large quantities. In this case, traders in the stainless steel market began to raise prices by alliance, and this price increase is not only aimed at the increase of demand, but also takes into account the fluctuation of raw material prices, the change of ex-factory price of steel mills and the adjustment of policies. In addition, it will refer to its actual inventory and take the initiative to raise prices. In this case, although the buyer's market demand is strong, the purchasing power has begun to decline, and even enterprises with strong purchasing power are unable to cope with the high prices during the high market. In the actual investigation process, Wuxi Lujinsheng Information Co., Ltd., as a professional market analysis organization, confirmed this point for us through a series of data. The main raw material of stainless steel price is metallic nickel. Due to the rapid development of global stainless steel industry and the improvement of production capacity, the demand for nickel has greatly increased. In addition to the increase in demand, as the main metal futures product of LME (London Metal Exchange), the fund's speculation has also continuously pushed up the price of nickel. From June 65438+ 10 to mid-May 2007, the price of LME nickel rose from $32000/ton to about $565438 +0000/ton, with an increase of nearly $20000/ton. As for the market price of stainless steel, taking the 304/2B 2.0MM coil, which is the main representative of the stainless steel circulation market, as an example, the market sales price rose from 35,000 yuan/ton at the beginning of the year to about 44,000 yuan/ton, with an increase of nearly 1 10,000 yuan/ton. However, this price is only the average selling price in the market. In this case, the pressure of purchasing cost has surged, and enterprises with weak financial strength have begun to stop production or even go bankrupt. Although the prices of nickel and stainless steel have fallen sharply recently due to the weakening demand, due to the shadow of previous high prices, more buyer enterprises are holding a wait-and-see attitude to compete with the seller's market, hoping to retaliate against the "high price" by reducing the purchase volume, which is also known as the market phenomenon of "buying up but not buying down" in the industry. Second, the reasons for the current situation of supply and demand in Wuxi stainless steel market Through field visits, we found that most merchants in Wuxi stainless steel market currently hold the agency qualification of a steel mill. It should be noted that the establishment of stainless steel agent qualification in the early stage is mainly aimed at agents in regional locations, such as TISCO, and gives an enterprise the agent qualification in the East China market. With the rapid development of stainless steel industry, the production capacity is also increasing. Steel mills found that relying solely on one or a few agents in the region could not adapt to their own output, so they began to give agents qualifications according to the number of orders of dealers in the later period, which made the market mechanism originally controlled by a few regional agents begin to collapse and the number of agents in the orders began to increase gradually. In this process, we found that the upstream steel mills still can't reach the scale of agents in the specified order quantity, and began to divide agents according to product categories, which made the number of agents in Wuxi stainless steel market increase sharply, both in the number of enterprises and in the diversification of products. After the formation of the agent mechanism, the supplier market has also expanded, and the market competition of "Big Fish eat small fish" has become more intense. Several large agents have begun to appear in the middle, such as Wuxi Daming Metal Material Co., Ltd., which is not only the designated product agent of major domestic stainless steel manufacturers such as Taigang and Baosteel, but also the domestic agent of well-known foreign stainless steel manufacturers such as Posco of South Korea and Nippon Steel Metal Processing of Japan, and so on. Since then, market pricing is not based on traders' own inventory or nickel price changes, but more on the alliance price of several major agents. At this point, pricing began to deviate from the economic law determined by the buyer's market. When the peak demand season in the buyer's market comes, the market price will not necessarily rise. On the contrary, in the process of mutual competition, big agents may arbitrarily lower their prices and weaken their competitors' competitiveness. For the buyer's market with poor market understanding and analysis ability, they only know what materials need to be purchased, so it is difficult to fully understand the internal market of this kind of market, so sometimes they mistakenly think that the price will still fall in the later period. Therefore, under the influence of the mentality of "buy up and not buy down", they hesitate to buy. After the agent ate the other party's inventory by lowering the price, a successful agent began to raise the market price, which led to the price of stainless steel rising all the way in the later period. At this time, the following buyers know that they have been teased by the competition of agents, but they can't buy them to maintain production.

It is under this market competition mechanism and potential rules that agents have the absolute right to speak about prices. Even in some cases, several large agents can force upstream steel mills to cut production by reducing the order quantity, thus affecting the international price of metallic nickel. Since then, the buyer's market has maintained enough vigilance on purchasing, and its trust in market prices has declined. Some large buyer enterprises have begun to establish their own price analysis institutions to make their own analysis of market changes, instead of just believing the one-sided words of agents. After this distrust relationship was strengthened, the current antagonistic pattern between suppliers and buyers began to take shape. Third, the problems existing in the supply and demand side of Wuxi stainless steel market Through interviews and investigations, we focused the problems existing in both sides on the disadvantages of the agency system in the domestic stainless steel market. It is understood that at present, in addition to the priority of delivery right, steel mills will also give agents ex-factory price discounts, which are not available to small agents or ordinary dealers. For example, in September, the ex-factory price of 304/2B 2.0MM coil of mainstream stainless steel products was 32,400 yuan/ton, and the agent enjoyed the preferential order of 600 yuan/ton. In addition, if the order is 1 1,000 tons and is paid in full at one time, the agent will continue to enjoy the 200 yuan/ton discount. It can be seen that the agent has already enjoyed the discount of 800 yuan/ton on orders. It is also with such preferential treatment that the agent's price itself has the competitive advantage of low ordering cost. After the price of the agent is determined, the orders of other dealers are not given according to the ex-factory price, but according to the sales price re-established by the agent. Therefore, it can be said that the increase in the ordering cost of ordinary dealers has actually pushed up the overall price of the market in disguise. In order to reduce costs, traders will continue to increase prices later, so they rarely consider the actual demand of the buyer's market. It is with such agency system and extended pricing system that the pressure of purchasing cost in the buyer's market is invisibly increased. Although the buyer's market knows that the discount of nearly 1 1,000 yuan/ton has been swallowed up by the agent, it is still forced to accept the pricing method of the agent's ex-factory price increase, which makes both parties' trust in the price disappear to some extent. Therefore, at present, the buyer's market has begun to resist the agent's price increase by establishing a purchasing alliance, which is mainly manifested in the behavior of centralized non-purchasing, which leads to the obstruction of market resources circulation, the continuous increase of market inventory, the forced reduction of steel production and the reduction of nickel procurement, which eventually leads to the global nickel price drop and the global stainless steel price drop. Therefore, the analysis shows that the formation of the confrontation between the buyer and the seller's market is ostensibly in the degree of trust in price setting, but in fact, there are great differences between the two sides in the existence of the agency system. Four. By analyzing the agency problems in Wuxi stainless steel market and the antagonistic contradictions caused by them, some suggestions are put forward to improve the industrial chain of Wuxi stainless steel market. Referring to the development status of foreign stainless steel industry, we suggest introducing the "alloy surcharge system" popular in Europe into the stainless steel industry chain in China. Stainless steel "alloy surcharge system" is divided into two parts, which consists of stainless steel benchmark price system and alloy surcharge system. The benchmark price of stainless steel stipulated by foreign stainless steel industry refers to the price calculated by stainless steel production enterprises according to market supply and demand and their own production costs, which generally will not change; Alloy surcharge is calculated according to the main raw materials of stainless steel, such as chromium and nickel, and according to their price changes, using a certain calculation method. It can be clearly seen from the above that the base price reflects the market demand, that is, it reflects 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 quarters (the third quarter is the off-season, mainly considering the habit of summer break in foreign stainless steel markets), there will generally be no major changes. The alloy surcharge is formulated according to the fluctuation of raw material prices, and there is a prescribed calculation formula, so there is an equation of "stainless steel price = basic price+alloy surcharge". In addition, it should be pointed out that stainless steel manufacturers in foreign markets generally have their own processing centers and distributors, and processing centers and distributors generally have their own shares in stainless steel factories, so their sales are only a commission on the number of sales, and the price is strictly subject to the alloy surcharge system. We compare the alloy surcharge with the agency system in China as follows: Comparison of the differences between domestic agency system and foreign alloy surcharge system. The pricing clarity of steel mills is only publicized with a single ex-factory price list, and the specific calculation method does not openly combine the market demand and its own cost with reference to the price changes of main raw materials. The algorithm is transparent and fair. The agent artificially controls the pricing, and the steel mill does not interfere with the reserve price and does not change. According to the fluctuation of nickel and other metal prices, the actual price reference deviates from the demand with little human intervention, and the water content is high. The data reference function of a single period is not based on demand. According to the fluctuation of raw material prices, it is credible. It can be seen from the above that solving the contradiction between the supply and demand sides in Wuxi stainless steel market and even in China stainless steel industry and actively introducing the "alloy surcharge system" can make the prices of steel mills and markets clear, facilitate supervision, and effectively increase the price trust between the supply and demand sides. 【 Conclusion 】 According to the actual situation of Wuxi stainless steel market, combined with the opinions of some analysts, and referring to the effect of implementing the "alloy surcharge system" abroad, it is considered that actively introducing this system is an effective way to solve one of the current contradictions. However, during our field visits, we found that China's stainless steel agency system has existed for decades and is deeply influenced by the agency system of related industries. Traders are reluctant to give the right to speak on prices to the buyer's market, and upstream steel mills are even more reluctant to make prices clear easily. State-owned enterprises including Shanxi Taigang and Shanghai Baosteel have always had the color of industry monopoly, so it will be more difficult to implement the "alloy surcharge system". At the same time, we found that the current market dealers and downstream buyers complained about the current price monopoly, and more and more people in the industry began to criticize the disadvantages of the agency system and called for the implementation of "alloy surcharge", so we believe that it is only a matter of time before the superior system replaces the agency system! Note: Recently, major stainless steel factories in China held a meeting to discuss the mechanism of introducing alloy surcharge into domestic steel mills, which may be officially introduced in June 5438+ 10. Alloy overload has been mentioned more than once in China industry. Since 2006, the sharp rise of nickel price has made domestic stainless steel manufacturers feel the cost pressure brought by the rising raw material prices, and major domestic stainless steel factories have been established one after another. The research group of alloy surcharge system studies the real way to avoid the rising risk of raw materials.