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Essential knowledge for buying and selling steel!

Time : 2021-05-21 Hits : 46

1 Steel mill: the production unit of steel

(1) Steel plant: refers to a steel production enterprise with all processes of blast furnace ironmaking, converter steelmaking, and rolling mill steel. Such steel plants are generally called large steel plants or large plants.


(2) Rolling mill: refers to a steel production enterprise that only uses rolling mills to roll steel. Generally, it is also called a billet rolling mill. It is more common in the production of high-speed wire, rebar, strip steel, section steel, and medium plates. Such steel plants are generally called small plants.


(3) Ironworks: refers to pig iron production enterprises that only have one process for blast furnace ironmaking.


Remarks: According to the quality of the steel produced and the size of the drop, it can be divided into first-tier steel mills, second-tier steel mills, third-tier steel mills, and even fourth-tier steel mills.


2 dealer

Refers to an enterprise whose main business is to buy and sell steel products. Dealers can be divided into first-level dealers, middlemen and other levels.


(1) Tier 1 distributors are also called agents, commonly known as steel mill contractors, which refer to steel sales companies that have signed long-term purchase and sales agreements with steel mills and regularly purchase large amounts of steel from steel mills for sales every month.


(2) Intermediaries: or second-level agents, commonly known as brick-and-mortar merchants, are companies that do not purchase directly from steel mills, but purchase steel products from steel mill contractors or other intermediaries for resale.


3 end users

Refers to companies that directly consume steel products, including various construction sites, various machinery manufacturing plants, home appliance manufacturers, and so on.


Cost-related terms



1 Depot fee

Refers to the related fees that the buyer needs to pay to the warehouse management unit when purchasing steel products and go to the warehouse to pick up the goods, including hoisting fees and storage fees.


2Short-distance freight

Refers to the freight expenses of the supplier within 50 kilometers of the city when distributing steel to the construction site.


3 Short-term capital occupation fee

Since the supplier distributes steel to the construction site, the construction site will generally hold back a period of time before paying the supplier. The usual time is one to two weeks; the short-term capital occupation fee is the payment for this batch of goods for one week to two weeks. The interest accrued.


4 transportation

Most steel mills have the same price policy for steel agreement customers in various regions. However, due to the distance between the steel mill and the local traders, the transportation of steel requires related costs. In order to enable traders from all regions to get the same steel mill resources, the price is basically the same. Steel mills will provide different transportation subsidies for each ton of steel traded in different regions according to the transportation distance.


5 Straightening fee

High-speed wire and coiled snail products. In some engineering processes, the high-speed wire and coiled snails need to be processed into fixed-length straight products. Special machines are required to straighten and re-cut the high-speed wire and coiled snails. The cost is more straightforward.



Dealer operation related terms


1 closed library

When the price shows a more obvious upward trend, because the sales situation is better, the merchants can sell higher prices for the goods in their hands. After reaching a certain sales volume, they will purchase the operation method of stopping sales, commonly known as warehouse closure.


2Limited sale

When prices show a relatively obvious upward trend, in order to control their own inventory not to drop rapidly, for some specifications that are relatively scarce in the market, the merchant may adopt the operation method of restricting sales, that is, a buyer can buy at most the same one in the company every day. The quantity of specification products, or the maximum total amount of steel that a buyer can purchase in our company every day.


3 rejections

It is also called out-of-purchase or sell-off, that is, when the price shows a significant downward trend, the sellers who have the goods sell at lower prices than other merchants.

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