Business Differentiation of Stainless Steel Tube Enterprises is Intensifying at Age of Meager Profit
Abstract: The whole industry is under the situation of meager profit, the business differentiation in stainless steel pipe industry is gradually increasing. Dominant companies can still maintain a high level of profitability. However, some poor management stainless steel seamless pipe manufacturers are still increasing the production in the state of loss, which increases operational risk and drags the whole industry down.
Business differentiation is an inevitable trend. First of all, from the location of view, near the coast, steel mills which purchase imported ore are favorable. But profit compression of some steel mills which purchase domestic ore is relatively large. It’s a important reason of business differentiation. Long flow steel plant in terms of cost control, downstream channels, financing costs have a significant advantage. And short process steel mills in these areas is obviously much worse. But they can’t stop production, because they have to retain the credit and market share, once stop, they will face the loan. Finally the situation will be no money, no market.
Currently, only large stainless steel seamless pipe business which have a variety of resource advantages can maintain the profitability. And some small businesses, due to its weak competitive advantages in the industry, in order to survive, they basically take measures of price change to increase their products’ market competitiveness. Thus it exacerbated the contradiction between supply and demand of the market, making the price of stainless steel tube down. And the gap between their own and large business is increasing.
Along with reshuffle of stainless steel pipe industry accelerating, in the next period of time, the production differentiation of small private stainless steel seamless pipe manufacturers and large seamless pipe factory may be reducing after intensifying, the whole stainless steel seamless pipe industry will also be improved.
JiaXing MT Stainless Steel Co., Ltd
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