Research on the Implementation of New National Standard Reinforcement Production by Major Steel Mill Brands in the East China Market
Jul 19, 2024
My Steel Network News: On July 15th, steel enterprises such as Zhongtian Steel and Zhongxin Steel have successively announced the switch to new production standards for hot-rolled ribbed and hot-rolled round steel bars. According to the dates on the announcements, Zhongtian Steel and Zhongxin Steel will start organizing the production of steel bars according to the new national standards on July 20th and August 1st, respectively.
The new national standard was released on June 25, 2024, and will be implemented on September 25, 2024, with only 73 days left for transition. Compared with the 2018 version of the recommended national standard, this time it is a mandatory national standard. This means that the new standard must be implemented, so production enterprises should familiarize themselves with the changes in the standard and adjust the production process as soon as possible before the implementation of the standard.
For this reason, the editor has conducted a survey on the production time of new national standards by major steel mill brands in the East China market, and the results are as follows:
As shown in the table, 52.17% of the steel mills in the survey sample have not yet determined the time to implement the new national standard for steel bar production, 26.09% of steel mills plan to start new national standard steel bar production in August, and only 21.74% of steel mills plan to start new national standard production in late July or September.
This is not only related to the cost increase caused by the new national standard production but is also closely related to the sales-inventory turnover rate of the steel mills. Article 25 of the "Interpretation of the People's Republic of China Standardization Law" stipulates that products and services that do not meet the mandatory standard shall not be produced, sold, imported, or provided. According to the regulations, after the new national standard takes effect, the old national standard products shall not be produced and sold. In the production link, it is not a big problem for each steel mill to switch to the new national standard in advance, but there are still risks in the sales link. Theoretically, the old national standard can also be produced and sold to dealers one day before the implementation of the new national standard, but it would be illegal and illegal for the dealers to sell the old national standard products the next day.
Under the current market pattern of high inventory and low demand, the smooth digestion of the old national standard inventory in the market will still be a difficult problem. This new standard has brought new challenges and opportunities to the market, but it also makes the market face the problem of digesting the original stock resources. After the implementation of the standard, the old standard steel bar products accumulated by the distributors may face the situation of being unable to sell.
Steel production enterprises should reasonably plan the production plan, balance the inventory structure of old and new products in the early stage of the implementation of the standard, and market traders should seize the time to sell the original standard inventory, to ensure that after the implementation of the mandatory standard, they can seize the market demand for steel bars that meet the new standard in time, maintain the market sales share, and form a "premium" sales advantage in terms of quality.
Note: Article 25 of the "Interpretation of the People's Republic of China Standardization Law": Products and services that do not meet the mandatory standard are prohibited from production, sales, import, and provision.
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