Since the beginning of this year, steel prices all the way down, the steel industry-wide profit levels dropped significantly, the loss-making enterprises has also increased. In this context, the steel trading business, profit is also no shortage of their profit model commendable, but conduction role played by fluctuations in steel prices, caused the concern of my colleagues in the industry because it helps in our understanding of the impact of the current steel prices down.
Votes arbitrage model
 
Votes arbitrage model can be considered a pioneer of the steel trading business innovation model, it is the money market, bank acceptance, to obtain cash, and spot steel conversion spreads a model. To the present, this model has not yet standard operating rules, but to ensure that the earnings of the steel trading business, has shown its future development space, with the steel trade in the currency market and the steel spot market practice, operating rules will become more sophisticated, because of their immature reasons, such cross-market arbitrage performance for the most junior of the operation, similar to the steel market, the initial sales model "moving bricks from cash instruments to steel spot, and then Notes to the cash operating half a day to complete, favorable on the shot, steel procurement to sales and sometimes loss, cash to convert the notes may also be a loss of points, but the two markets after the conversion is complete, you can really profit from the steel procurement to sales, if negative profit operation for a long time, the impact of the steel market prices should be negative.
 
Orders for pre-sales mode
 
Order pre-sales model for the steel trading business in the traditional marketing model, an intensive sales management. Is higher as a model of the traditional sales model, the first sales orders, and then select the procurement channels, one of the stable profit, but in the current steel prices have been declining, the use of this model, but also exacerbated the market price of steel fluctuations. Steel trade to avoid the risk of steel prices generally use the orders mining goods, not the steel stocks, the operation is the formation of short, flat, fast, short procurement cycle, from sales to may one day, flat spreads only a dozen, sometimes a few dollars, fast, can never delay the shipment of the time of one minute, this sales model steel trading business, also known as steel futures, it avoided the risk of sales of the steel trade, stable profit. its steel prices upward like a big disc, heavy pressure at the top.
 
Agreement settlement pattern
 
Agreement settlement pattern is the use of the rules of the settlement agreement of steel manufacturers, steel prices are way down, the steel trade and chambers of commerce in the first half of level or lower than the quick sale of steel prices, half of the market downturn to hit a low price sales, and then make up the profit down the average price of the full month, at the end by steel settlement price, this mode of operation requires the late fluctuations of the steel trade of the steel market, price movements have clear expectations, although it is the use of existing vendor marketing model defects, but required to have a high level of market forecast capacity, which will have the expected poor, in the market to lower prices, lack of confidence in the market, selling steel to become the norm, Forced steel reduce the settlement price, which eventually led to the price of steel long-term downturn.



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