How to do steel business in 2019?

Recently, the chairman of a steel trade company accepted an interview with the reporter of China Metallurgical News, saying that the steel market situation in 2019 was more complicated and severe than that in 2018, and the market was not as good as 2018. The main reason is that the downward pressure on the economy will increase and the demand for steel market will decrease. Some professional organizations predict that China's steel demand in 2019 will be about 800 million tons, down 2.4% year-on-year.
So, what should the steel business do in 2019? Many steel traders should have a good response:

The first is to expand the new source and growth point of “steel demand”. Recently, the Central Economic Work Conference has clarified the positioning of “new infrastructure construction” for emerging industries such as 5G, artificial intelligence, and Internet of Things. It points out that the potential for investment demand in China’s development is still huge at present, and it is necessary to play a key role in investment and increase technological transformation in manufacturing. And equipment upgrades, strengthen the construction of new infrastructure such as artificial intelligence, industrial Internet, and Internet of Things, increase investment in inter-city transportation, logistics, and municipal infrastructure, fill in short-boards for rural infrastructure and public service facilities, and strengthen natural disasters. Prevention and control capacity building. Steel traders believe that these new infrastructure construction will bring potential sources of demand and growth to the steel market.

The second is to implement strategic transfer. In recent years, China's infrastructure investment has emerged as a feature of regional sinking and field optimization—from large cities to small cities and even county towns, from developed areas to backward areas, and from traditional areas to environmental protection. As a result, steel traders expect the infrastructure growth rate to be around 7% in 2019, and the growth region will be in the central and western regions, small and medium-sized cities, and the “steel demand” will increase significantly in these regions.
The third is innovative business philosophy and marketing model. Many steel trade companies are working hard to expand new customers and new markets while consolidating old customers. Some steel trade companies are closely integrated with upstream steel manufacturers and downstream end users, and adopt joint bidding methods to participate in the steel supply rights for major construction projects; some steel trade companies have established strategic partnerships with large manufacturing companies. This way of cooperation with upstream steel manufacturers and downstream end users has become a new way for steel traders to open up markets.

The fourth is to follow the “Belt and Road” strategy and expand the international market. Steel trade enterprises should take a long-term view and implement the “going out” strategy, seize the opportunity of demand growth of steel products along the “Belt and Road”, accelerate the rational distribution of international steel production capacity, and take the road of cooperation and win-win. The current national economy along the “Belt and Road” has shown a rapid growth trend of 4.6%. The steel consumption in these countries and regions has shown a growth of 4%. In 2019, the demand for steel in countries and regions along the Belt and Road Initiative will continue to grow.

The fifth is to deeply integrate the futures market, spot market, and e-commerce. Some steel traders said that in 2019, the futures market and the spot market will be further integrated. At the same time, steel traders will accelerate the deep integration of e-commerce and steel supply chain, accelerate the deep integration with international steel layout, innovate cooperation mode, reduce investment risks, accelerate the construction of large-scale logistics of cross-border steel supply chain, expand steel exports, and reduce Domestic market risk.

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