China is not only a major importer of iron ore, but also a major importer of scrap steel. However, due to the long-term foreign and disorderly competition, it is difficult for China's steel enterprises to grasp the initiative in pricing in the international market, causing huge losses.
In order to stabilize and standardize the scrap market, industry insiders have suggested that we should unify the pace and establish a community of interests such as scrap procurement alliances or supply and demand alliances. However, the difficulty of the joint is that the interests of state-owned enterprises and private enterprises are difficult to adjust, and some insiders worry that this will lead to the monopoly of state-owned enterprises in the scrap steel sector.
Monopoly suspect
Private steel enterprises are the main opponents. They believe that the establishment of procurement alliances is likely to be a monopoly of state-owned steel enterprises for the industry, and a joint scrap association to suppress private enterprises.
The manufacturers that agree to the establishment of the procurement alliance are all large state-owned enterprises. For them, the establishment of a procurement alliance is a win-win situation. On the one hand, it can guarantee the stable steel source of state-owned steel mills; on the other hand, private small and medium-sized steel mills will be forced to purchase scrap steel from state-owned steel mills.
Scrap traders and suppliers also disapprove of establishing procurement alliances. They said: "The power of the people is very big, and goods that can get the right price can come in." And that the establishment of the procurement alliance is to restrict imports, so that small enterprises can only turn their targets to domestic procurement, reducing the profit space. .
"The large state-owned steel mills have become the overlord of the sky." The head of a small steel mill told reporters that "the bigger the plates of state-owned enterprises are, the better they are, but they cut off the path of private enterprises importing scrap. Small and medium-sized steel mills with production capacity below 2 million tons will be difficult to sustain."
Qi Qiping, secretary-general of the China Association of Scrap Steel Applications, also acknowledged that the idea of ​​establishing a procurement alliance was opposed by some scrap traders and suppliers. The current concept is only an advocate. Previously, China Waste Steel Application Association set up a scrap trade trade coordination committee, which is to play a role in establishing procurement alliances and reducing procurement costs.
Scrap prices rise
According to a report from the International Recycling Bureau (BIR), global scrap prices have strengthened in the second quarter of this year as scrap inventory levels have fallen and supply available for purchases has tightened. Although the price of high-quality scrap in the US and other major markets fell in March, prices have reached the bottom. The spread between primary scrap and secondary scrap returned to normal levels.
A US scrap trading company said that there is a shortage of high-quality scrap market. In the UK, the high inventory of scrap steel accumulated last year is declining. Adjustments and reforms continue to hamper the Italian port scrap trade, and traders have to replace scrap with pig iron to make up for the shortage of CIF. The Far East market is the most active scrap trade, with indications that demand for scrap in China and South Korea is growing. Experts pointed out that the price increase of steelmaking raw materials, including iron ore and pig iron, is bound to promote the price increase of scrap steel.
"In recent years, scrap prices have continued to rise, especially since last year's price increase was amazing." An employee of Shanghai Ganglian E-Commerce Co., Ltd. said that scrap prices in East China once reached 2,600 yuan / ton.
Coordination meaning
Huang Jianqing, secretary-general of the Shanghai Waste Materials Industry Association, said that steel mills need 40% to 70% of scrap steel as raw materials. As the amount of raw ore resources decreases, so does the demand for scrap. According to the prediction of China Iron and Steel Association, after 2005, China's scrap gap will reach 15 million to 20 million tons.
Stimulated by price and demand, the scrap import business expanded rapidly. According to reports, companies that previously imported scrap must have certain qualifications. Now they have been relaxed, and any enterprise can import scrap. At the same time, scrap intermediaries have emerged in large numbers.
"If there are more enterprises, there will be a phenomenon of buying." Qi Qiping said, for example, iron ore, there are more than 500 imported enterprises, and now more than 400 have been cut, leaving only more than 100, just to facilitate coordination. Uniform pace. "Understanding the measures of iron ore, we understand the significance of establishing a scrap procurement alliance."
In order to stabilize and standardize the scrap market, industry insiders have suggested that we should unify the pace and establish a community of interests such as scrap procurement alliances or supply and demand alliances. However, the difficulty of the joint is that the interests of state-owned enterprises and private enterprises are difficult to adjust, and some insiders worry that this will lead to the monopoly of state-owned enterprises in the scrap steel sector.
Monopoly suspect
Private steel enterprises are the main opponents. They believe that the establishment of procurement alliances is likely to be a monopoly of state-owned steel enterprises for the industry, and a joint scrap association to suppress private enterprises.
The manufacturers that agree to the establishment of the procurement alliance are all large state-owned enterprises. For them, the establishment of a procurement alliance is a win-win situation. On the one hand, it can guarantee the stable steel source of state-owned steel mills; on the other hand, private small and medium-sized steel mills will be forced to purchase scrap steel from state-owned steel mills.
Scrap traders and suppliers also disapprove of establishing procurement alliances. They said: "The power of the people is very big, and goods that can get the right price can come in." And that the establishment of the procurement alliance is to restrict imports, so that small enterprises can only turn their targets to domestic procurement, reducing the profit space. .
"The large state-owned steel mills have become the overlord of the sky." The head of a small steel mill told reporters that "the bigger the plates of state-owned enterprises are, the better they are, but they cut off the path of private enterprises importing scrap. Small and medium-sized steel mills with production capacity below 2 million tons will be difficult to sustain."
Qi Qiping, secretary-general of the China Association of Scrap Steel Applications, also acknowledged that the idea of ​​establishing a procurement alliance was opposed by some scrap traders and suppliers. The current concept is only an advocate. Previously, China Waste Steel Application Association set up a scrap trade trade coordination committee, which is to play a role in establishing procurement alliances and reducing procurement costs.
Scrap prices rise
According to a report from the International Recycling Bureau (BIR), global scrap prices have strengthened in the second quarter of this year as scrap inventory levels have fallen and supply available for purchases has tightened. Although the price of high-quality scrap in the US and other major markets fell in March, prices have reached the bottom. The spread between primary scrap and secondary scrap returned to normal levels.
A US scrap trading company said that there is a shortage of high-quality scrap market. In the UK, the high inventory of scrap steel accumulated last year is declining. Adjustments and reforms continue to hamper the Italian port scrap trade, and traders have to replace scrap with pig iron to make up for the shortage of CIF. The Far East market is the most active scrap trade, with indications that demand for scrap in China and South Korea is growing. Experts pointed out that the price increase of steelmaking raw materials, including iron ore and pig iron, is bound to promote the price increase of scrap steel.
"In recent years, scrap prices have continued to rise, especially since last year's price increase was amazing." An employee of Shanghai Ganglian E-Commerce Co., Ltd. said that scrap prices in East China once reached 2,600 yuan / ton.
Coordination meaning
Huang Jianqing, secretary-general of the Shanghai Waste Materials Industry Association, said that steel mills need 40% to 70% of scrap steel as raw materials. As the amount of raw ore resources decreases, so does the demand for scrap. According to the prediction of China Iron and Steel Association, after 2005, China's scrap gap will reach 15 million to 20 million tons.
Stimulated by price and demand, the scrap import business expanded rapidly. According to reports, companies that previously imported scrap must have certain qualifications. Now they have been relaxed, and any enterprise can import scrap. At the same time, scrap intermediaries have emerged in large numbers.
"If there are more enterprises, there will be a phenomenon of buying." Qi Qiping said, for example, iron ore, there are more than 500 imported enterprises, and now more than 400 have been cut, leaving only more than 100, just to facilitate coordination. Uniform pace. "Understanding the measures of iron ore, we understand the significance of establishing a scrap procurement alliance."
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