Steel plate prices likely to rebound
----Interview with Yang Zhiyi
Deputy General Manager
Tangshan Quansheng Steel Processing Co.
- Founded in 2003, Tangshan Quansheng Steel Processing Co. acts as the leading steel trader in North China. The company majors in steel plate and HRC, with the annual sales volume of approximately 800,000t. After more than 20 years development, the company built harmonious relationships with mainstream steel mills such as Tangshan Steel, Ansteel Group, Shougang Group. Tianjin Steel, Yingkou Steel, Wenfeng Steel, Jingye Steel, Yanshan Steel, Anfeng Steel, Donghua Steel and Zongheng Steel and so on.
- Asian Metal: Good afternoon, Mr. Yang. Thanks for joining the interview. Please could you briefly introduce your company?
- Mr. Yang: My pleasure. Founded in 2023, Tangshan Quansheng Steel Processing Co. locates at 186.8 kilometers of Tangshan section of National Highway 205, which meant it's convenient for transportation. Acting as a traditional steel trading company, we trade with steel plate and HRC, and also involve in the processing. We are the agent of steel mills and order from steel mills directly. Besides ordering special grades of steel from steel mills, we also provide extended services such as plasma processing and cutting. To better serve our customers, we build own logistics system, achieving a one-stop business of sales, processing, and distribution, which can meet the fast service needs of most customers.
- Asian Metal: Which domestic steel mills do you cooperate with? How about customers?
- Mr. Yang: For steel plate, we mainly cooperate with Tangshan Steel, Ansteel Group, Yingkou Steel, Shougang Group, Tianjin Steel, Wenfeng Steel and Jingye Steel. For HRC, we cooperate with Tangshan Steel, Yanshan Steel, Wenfeng Steel, Donghua Steel and Zongheng Steel. We supply steel to traders and end users, with the former accounting for about 80% and the latter around 20%. Our end users come from large steel processing and manufacturing enterprises as well as riveting and welding steel manufacturing industries.
- Asian Metal: How about the current demand for steel plate? Does it witness obvious change compared with the corresponding period of last year?
- Mr. Yang: The demand from downstream industries shrinks this year. After the Chinese New Year holiday, we ordered steel normally, but the sales reduced by about 15% YoY. We build enough materials for each grade, but end users hold back from purchasing.
- Asian Metal: Prices of steel plate kept decreasing after the Chinese New Year holiday. What do you think act as the reasons for the downward price trend?
- Mr. Yang: We believe the shrinking demand and the severe competition act as the main reasons for the price decline. Materials arrived normally during the holiday, while the sales suspended. After the holiday, stocks kept rising dragged by the poor sales. Meanwhile, agents face the pressure to order new materials for next month. Taking us as an example, though our inventories did not increase obviously after the holiday as we controlled the ordering volume before the holiday, the capital pressure increased due to the slow sales and the reduced supply of mills for the suspension. Therefore, the facility maintenances of steel mills act as a double-edged sword. It released the stock pressure in the market, but heightened the capital pressure of traders and forced traders to cut prices to promote sales to withdraw capitals. In the meantime, pallet companies also keep eager to withdraw capitals, both leading to the downward price trend of steel. Besides, the continuous price declines of raw materials weakened the confidence of market participants.
- Asian Metal: How do you forecast for the steel plate price trend in Q2?
- Mr. Yang: To be honest, we found it hard to figure out the trend even after several dozen years in the industry. There are many factors influencing the prices, such as the capital market and the national policy. Personally, I believe prices of steel plate likely to edge up in the second quarter. On the one hand, the cost support from raw materials exists. Besides, the supply reduced following the suspensions of steel mills. Besides, the demand might recover with downstream projects resuming production gradually. In addition, the exports may keep transferring the domestic stock pressure. The market remains in a stalemate since the beginning of the year, and we are looking forward for the arrival of dawn.
- Asian Metal: How do you plan to improve the competitiveness?
- Mr. Yang: We believe that improving products and services acts as the key to enhance our competitiveness. Thinking about what customers think, responding to their urgent needs, solving their doubts, and providing them with what they need are the survival strategies of enterprises. The traditional trade entered a bottleneck period, amid fierce competition. The National People's Congress and the Chinese Political Consultative Conference (NPC & CPPCC) reiterated the intelligence. Enterprises need to learn more and keep up with the times. Recently, the popular collaboration between Tuzhan Intelligence and the Peking University team generating a local visual model in China, making the supply of the industry more accurately match the needs of users. In the future, we will gradually introduce artificial intelligence and deeply root in the industry, to provide customers with more precise and efficient services.
- Asian Metal: Thank you for the wonderful sharing. Wishing Quansheng further progress!
- Mr. Yang: Thank you to Asian Metal for giving us the opportunity to express our opinions. Wishing Asian Metal better and stronger, and also wishing all of your hardworking analysts a smooth and successful work!
