Steel traders want to be cautious in their diversified transformation

Selling steel is not as good as real estate speculation, it seems that steel traders who have continued to survive in recent years have been thinking together. Even some steel trading companies have already been involved in selling real estate, mining, and private lending. Unfamiliar areas, and this transformation is not favored.

“The steel trade enterprises have not yet reached the point of transition to cross-industry. Enterprises must adjust their own strategies according to the environment, but they cannot adjust their business direction freely. For the steel trade enterprises, the big environment is not good, and other industry risks besides steel trade are also Very large, companies should base themselves on steel trade and strengthen their services,” said an industry source in an interview with a reporter from China Business News.

Yu Huabin, president of the Minsheng Bank Metallurgical Finance Division, also agreed with this view. He told reporters that in order to change the situation of a single trade model and a meager profit, steel trading companies have begun to transform, which is the general trend. However, steel trading companies must also increase their awareness of risk prevention, and must stay away from speculative transactions, exposures, and other extremely high-risk issues. Cross-industry investments such as guarantee companies and real estate must also be extremely prudent.

Yu Huabin believes that a very good direction for the transformation of steel traders is to transform from a traditional single trader to an integrated supply chain service provider and provide logistics, warehousing, cutting, processing, distribution, etc. for users on the supply chain. More value-added services, as an integrated supply chain service provider. "Comparatively, steel trading companies have certain advantages in resources and channels, and it is easier to upgrade services."

Yu Huabin also pointed out that simple trade services do not have much fixed asset investment, and generally require only a certain amount of start-up capital. Pledges can be leveraged through such means as pledges. However, real industrial chain extensions, such as processing and distribution, require certain Investment in fixed assets, such funds are not only larger but also more stable.