In the winter season, the owner of Jiangcheng Steel gave up the goods

Outside the factory building, a sweltering cold wind blows over and in the Hongshan District beacon fire steel market, Lao Guo wraps up his heavy cotton-padded clothes. “According to the usual practice, it should be the winter storage season, but this year we decided not to stock it.” Lao Guo is one of Wuhan's 10,000 steel bosses, he said.

Wucheng Steel boss does not make money this year

The reporter learned that due to the continuing downturn in steel prices this year, the steel bosses who are doing cold rolling and hot rolling have lost money except for rebar. "This year's market can be compared with 2008, when the boss who has lost more money is in debt of tens of millions." The owner of a steel market in Danshui, Wuhan City, uses the words "want to change jobs" to describe the current mood.

"The supply of real estate companies now requires us to pressure our funds. We have barely made money this year. Where is there funds for them?" complained one steel boss. It is understood that nearly half of the steel bosses in the Wuhan market currently have almost no income this year. Although in the days to come, some want to continue the steel business and some want to change jobs, at least for the moment, they all have a common idea that they want the steel mills to reduce their production prices.

The steel mills "killed" did not reduce production

According to statistics, from January to September this year, the accumulated investment in the fixed assets of the steel industry reached 371.7 billion yuan, a year-on-year increase of 19.7%. However, it is extremely disproportionate that, compared with the fiery investment, 25 out of 77 large and medium-sized steel enterprises suffered losses in October, but the steel mills still “killed” and did not reduce production.

As the production of steel companies is the lifeline, if the production loss of 100 million yuan, not all production stops will have to lose 200 million yuan, so who dares to stop production? An industry insider to break the secret.

Iron and steel enterprises, as local taxpayers and large employers, are relatively easy to get from banks. Many steel companies do not necessarily use the main business after the banking industry, but instead extend the tentacles of capital to other areas. Industry insiders have thus analysed why steel mills can reduce production.

Zero inventory "New Year" into the mainstream

In the year of the downturn steel market, steel bosses have also lost confidence in their expectations of the future market. “We have kept more than 5,000 tons of inventory in the same period in previous years, and now we have more than 1,000 tons. We have orders to the steel mills, and we have to protect our products and sell them. We can’t even dare to suppress the goods.” Dan Wang, Wuhan Steel Market Steel boss surnamed told reporters.

Many companies in the steel market now maintain a wait-and-see attitude. They prefer to have low inventory or zero inventory, and they don't want to risk continuing to purchase. There was a wave of price increases before the Spring Festival in previous years, and now it seems to have become a bubble. An industry source said.

For steel bosses, financial pressure is an insurmountable barrier. Xue Heping, an analyst at Wuhan Steel, said that close to the end of the year, the repayment pressure of the steel bosses has skyrocketed. In order to repay the bank promptly, some steel bosses have already sold goods at low prices or at a loss.