Steel and Iron Export in China

Abstract

The primary objective of this report is to find out the most suitable market that imports Steel and Iron from China. The report analyses the market characteristics, competitive conditions, financial and economic conditions, as well as political, legal and social conditions in each prospective market. The report discusses the different types of grades countries purchase and if there are any contracts which bind both the importing and exporting countries together. Production techniques are also mentioned and how they can possibly affect the steel exportation of steel and iron in china. Finally the report concludes with an advice on which is the most suitable importing market for China’s steel industry and provides further information on how the company can further penetrate into the global market. The document also touches on some aspects of management decisions and financing decisions as some of the major decisions that the management of a company must make. As successful global country, the management decisions get to be very important in the prosperity.

Introduction           

Financial sector in marketing industry is a very sensitive area in the selling and buying of products. Be it its international or local business realization of profits is always the geared achievement. China is doing pretty well in the export of various products to outside countries like the UK.A s it’s evident, London and New York are seen by the Chinese to be the word leading and key players of Financial services. As a manager of China’s iron and steel industry and trade Group Corporation, it is recommended that I maximize the export to the outside world. Comparing the potential market; Brazil, Ghana Saudi Arabia, Vietnam and the UK, the demand of iron and steel is relatively able to China iron and steel industry is nearly a century old. This means that this has been the oldest products of trade of china. These two products find applications in every imaginable facet of almost all individuals’ lives. The global steel industry has been witnessed to generate very interesting and dynamic market trends in china. There are various grades of the two products. This brings various classifications and classifies the classes in which the exportations occur. There are more than 3500 grades of still available all over the world today. These have various applications and uses in which they are used. Industrial policies and government policies affect us as managers in the exportation industry. Consumption of these two products has indicated to be tremendously increasing in various consumer countries: more on first worlds and less on developing and 3^rd world countries. The industry of iron and still in china is divided into two major categories private and public sectors where the public sector is further divided into secondary products.

Product scenario

The international production of steel and iron in china is seen the 7^th largest world producer of the product. For the export of iron and steel to various outside world companies, production technology plays a significant role under which product goes or is exported to each country. The cost of production determines the market price in which the two products are to be sold. In production of world class steel higher technology level is required.

To be more specific, production of steel to the UK (steel which is exported to the UK) demands that the technology for producing the product must be exceptionally high. Power costs are normally high in this production. Estimation from the various sales indicates that the UK takes approximately 15 percent of china’s steel. Taxes and duties (excise duties sales tax) should it be direct or indirect must in no doubt affect the export rate? Normally, the UK’s export rate duties are normally higher than the four other countries listed above. 

After the collapse of the Soviet Union, the global steel market is seen to indicate target of the global market. This is in no doubt goes hand in hand with rapid growth of technology. Higher production of value added products and the entire global market have entirely relied on the rapid growth of this technology.

Ghana and Saudi Arabia are generally seen to generate a similar market trend in this export business. These two countries are majorly seen to dominate the private sector and the public sector but in the public sector it is observed that the export is on secondary products. Ghana for instance, imports from china finished products of steel and iron to mean products like cars, ships and other day to day use steel products like cutlery. A great focus is put into branded products or value added products to improve their quality.

China has received long term contracts in delivery of steel and iron to Saudi Arabia. The market is entirely dominated by secondary products of steel (finished products). From the economic reforms in china it is very evident that the production of steel and iron to countries like Saudi Arabia has maintained a stable trend. The long contract given to china by Saudi Arabia has been honored in the global market and approved by various financial institutions like the World Bank.

On the other hand, Vietnam challenges India in terms of competition of production of steel and iron. However, India still exports iron and steel to Vietnam. As can be seen there are elements of iron in Vietnam and can comfortably sustaining the demand of Vietnam’s need of coal and steel? This is why china is able to still export iron and steel to Vietnam. In spite of these disadvantages china is still doing well in the entire global market.

Current investment of china in the steel and iron industry is expanding. Consumption of steel in china is giving a competitive trend in various public and private companies. The companies are fairly able to compete for the local and global market.

Essar steel limited

As a manager of Essar steel limited having have held this position since 1995, the company is seen to be doing very well in the global market. The company has always dominated the awards of contracts for delivery of steel to various parts of the world including the UK, Brazil, Ghana, Saudi Arabia and Vietnam. The strategies I have laid forward I as a manager are diversified in the major production trends like production technology and proper utilization of production materials and tools. The company is the first to receive the iso certification and TUV certification.

My company plans to increase capacity of steel and iron production by 20 percent i.e. 4.6 million MTPA in the next two years. This will in no doubt increase the entire china economy with a remarkable percentage.

Total production of steel products in my company has remarkably registered highest sales in china. Iron and steel is fairly exported under manageable government policies with proper management and observation of government policies. Duties and taxes must be keenly evaluated and recovered from the successful exports. Domination of the market however is no guarantee as the trends keep changing from time to time. Therefore, institutional policies must be regulated to ensure increased investment in the steel industry. Among these giving room for private ownership and foreign investment within the company will in no doubt boost the entire iron and steel market.

Summary

Competition in steel production is no longer a debate in the production of iron and steel in china. However, globally china must be very careful in her position to stimulate the needed demand. Micro economic policies also need to be regulated and frequently addressed in order to go hand in hand with the rapid changes in technology. The government must also administer measures that contain inflation. Economic development will entirely depend on government policies. All in all China has for a long time dominated in the production of iron and steel in the entire globe. It’s very possible to dominate penetration of the global market only through high quality improvement of china steel. This should never be the cause to forget the local market as it offers higher opportunities for economic growth. Generally to speak, through proper management and high quality production techniques the export of steel and iron to the outside world is likely to improve. In the case of the UK and Brazil, the exportation of steel can improve through proper use of technology and production techniques. Proper regulation of prices is likely to increase the amount exports made per financial year. The government is therefore likely to play an important role here. Considering the public and private companies that make sales globally should be given proper chances to either get shares in our steel companies. This will help boost the sales in Ghana and Saudi Arabia as these two do not majorly require to large imports. It should however be noted that the UK makes the largest imports of steel from china. Both the large and small importers play an important role an as managers proper marketing goals and contracts must be made to ensure maximum realization of profits.