Steel Market Price Changes On MTD And Countermeasures

Nowadays steel is absolutely one of the most essential raw materials for Industries, especially for Machinery enterprise. However the frequent fluctuation of China Steel Market largely makes serious affects on local Machinery manufacturers. It’s obvious that Machinery makers could get much benefit if they could foresee Steel price trends.Steel in China is coming to a picture with large number of consuming volume but low increasing speed. Currently China is in large demand of steel in many fields such as real estates, motor, traffic, constructions.... Global main providers of Iron Ore are challenging steel companies on price. But China Steel companies keep merge and acquire foreign iron ore resources and meanwhile develop domestic new resources, they will reduce the rely on the foreign providers in future. Maybe they have no ability to win in a short term. But from a long term, they will stand on the positive side. As far as the machinery industry is concerned, the most important thing is how to face the price fluctuation of raw steel and what actions need to take.In2011, China economy was still developed but overall stable, while inflation level kept high and not relieved. Steel price changed frequently but in a narrow range. To pursue more benefits and productivity scale, the steel production achieved a new step. Actually Steel consuming volume was not much increased. Long Term Agreement (LTA) Price of Steel Ore will keep high level, but the actual market price will not go to higher stage until end of this year.MTD Company is a worldwide leader of garden and outdoor machines; with factories locate in Europe, North America, Asia, Australia and South America producing equipment for both residential and commercial markets. MTD Suzhou Company is one of factories supplying parts such as blades, tiller tines, brackets and tire assembly, and finished goods. Now the factory has big concerns on2key challenges:1. Corporate product price and foreign customers price are not increased while Steel cost keeps increasing;2.Has no capability to fix China steel price forecast which always lead to material cost big increase.By the analysis of the demand and supply of steel and the forecast of Steel price from these years and2011later on, MTD should do the best to decrease the dependence on steel as much as possible and make cost management.