China's steel distribution set for change

Dec 12, 2012 | 11:54 AM |

Tags  China distribution sector, steel, distribution, sales, financing

SHANGHAI — The steel price crash in China that rattled global steel markets earlier this year exposed just how turbulent China’s markets can become when the country’s growth slows and the government doesn’t step in with a credit and investment boost.

It also revealed the chaotic nature of the country’s steel trade, something that steelmakers are beginning to address more seriously by changing the way they work with traders and developing more channels of their own to sell steel.

China’s steel market began to weaken in April and then slumped during the third quarter amid deepening concerns about a slowdown in economic growth, as well as a sharp turndown in the construction sector after the government moved to deflate a property bubble. The bear run appeared to be exacerbated by the concentration of price risk in China’s sprawling and fragmented network of intermediary steel traders. ....

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