Nowadays most steel trading companies are planning for marketing strategies for 2010, which reflects the concerns and uncertainties prevailing in Chinese steel market.
A steel trading company indicates that their plan will depend more on clients rather than steel mills and that they would be paying more attention to the market conditions and take into account the other factors including spot trading.
Some CEOs believe that first priority is to open up new sales channels. They said that one could no longer confined to old sales channels under such grave situation but develop new terminal market positively to seek new business opportunities.
In this respect, a project division has been established targeting projects which has brought a number of steel supply contracts of some key projects.
Credit sale is also a business philosophy established. In view of some end users in short of funding in procurement of raw materials, steel trading companies introduced credit sale model which is companies will provide steel if uses issue bank letters of credit and commitment payment within a certain period of time. This service is favored by users and significantly increases companies’ sales.
Furthermore, some companies consider moderately involved in over the counter electronic market and futures market transactions making a combination of futures, spot and over-the-counter electronic markets. For example some companies will reduce the section operation scale and shift focus to HRC, WRC and rebar for they could be traded in all the three markets helping to avoid market risks.