The temptation of bank lending rates
Under the temptation of the demand for loans, the steel mills only full production, and steel enterprises in the performance of active production and business activities. Only, such as steel mills in order to successfully obtain the appropriate loan from the bank, in order to invest in other industries and to maintain the normal operation of the enterprise. Perhaps we can be understood as steel mills operating at full capacity only as a financing tool, the implication to abandon the relationship between supply and demand of the steel city.
Stable market share
Another reason, stable market share, to lay the market foundation for the future of the stock market upturn. Steel has been reluctant to First cut, multi-select to wait and see his family first "eat crab", one important reason is to protect existing market share. In order to prevent the fast delivery of the existing market demand, in order to ensure the stability of the existing market share, the steel mills would rather through a series of orders, clearing the preferential policies for subsidies agent is not willing to easily give up the market. Steel mills, once discontinued, need at least two months or more before being re-formed production capacity.
The maintenance of good data
According to informed sources, the steel mills gone against the tide of the most important reason to maintain high production, and local governments need to maintain a relatively good economic data related. The eighteen Congress around the corner, local governments do not allow the economic data are too embarrassed, it will use all means of executive orders and other requirements of the enterprise in the area during this period to maintain a certain production activities, strong. Done to it to see As regards what the consequences, for the time being not considered within the scope. Until the end of the sensitive period, I believe that all levels of government will be given in all aspects of the enterprises must obey the compensation.
State-owned enterprises to complete the "shared task"
China's steel production enterprises, mainly state-owned enterprises, which is why the national steel mills operating in early June differentiation tend. Large-scale steel production can not increase due to small steel mills (which is often said that private steel mills) capacity of Quezon City decline. Analysts believe that steel was the result of such a structural difference of differentiation, in addition to the small steel boat trumpet U-turn ", the different obligations of each of the parties bear evident at the moment, the state-owned steel mills must complete the assessed tasks private enterprises, but do not affected.
The steel did not dare do not want to hastily cut
In general, the benefits of state-owned enterprises better ability to control costs is low, the cost of state-owned steel mills than the private steel mills high degree of depreciation from the machine to consider the cost of production of new steel mills higher than the old steel mill. Therefore, the differences in profit margins of different steel. The prices the market, although the profit margin is negative there will be some steel mills, but also some of the steel mills there exists a certain profit margin. In this case, there is a profit margin of normal steel production, and other steel forced to produce in order to maintain the stability of the market share or marketing channels, and ultimately make the supply of steel to sustained high and difficult to play to boost steel prices role.
The supporting role of the cost of steel prices by steel mills cut steel production measures the effect is more limited, is relatively short. Due to the blast furnace of fire costs as high as millions or even thousands of yuan, less than extreme circumstances, the steel mills will not be easily extinguished the blast furnace. Loss is less serious cases, steel mills tend to reduce feeding and other measures the elasticity of production, while the blast furnace will not shut down. In this case, once received a more satisfactory order, the steel can quickly restore the crude steel production, the final suppression of the steel price trend.
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