Research On The Development Of Advance Financing Business Of China Steel Network Corporation

The iron and steel industry is a national basic industry,but also a pillar industry.According to the official disclosure of the National Bureau of statistics,China’s crude steel output will reach 1.053 billion tons in 2020,a year-on-year increase of 5.2%.According to the current average price of 5500-5800 / yuan / ton in the ordinary rebar market,the steel market is more than 5 trillion yuan.The industry has experienced three economic cycles and is now relatively mature.However,few people know about the advance business in this industry.Advance business is a kind of business model in steel trade industry.This is a business model that has sprung up around 2010.With the development of recent years,advance business gradually tends to the mainstream.But this business model is not very mature,in the process of gradual development,more risk exposure in the process of business development.At present,most of the downstream customers of steel traders in the steel trade industry are central enterprises and state-owned enterprises.This kind of customers are usually strong and have strong bargaining power.Based on the business yield,this kind of enterprise is not conducive to the business development of steel traders.However,the anti risk ability of private enterprises is weak,which has a natural high risk.Therefore,due to the consideration of risk,steel traders have to take the downstream customers of central enterprises and state-owned enterprises as the mainstream marketing objects of the current advance business,which also leads to the intensification of market competition and the lower and lower return rate of the current advance business in the market.The two core indicators to measure the development of advance business are the non-performing rate and the rate of return.The former is affected by the management mode,the means of early due diligence,the guarantee measures and the types of downstream customers.The latter is affected by interest rate risk,market competition and downstream customer types.Therefore,to carry out advance business is to optimize the above two core indicators and control the various risk factors that affect the two indicators to a minimum.This paper will take China Steel Grid Corporation as an example,focusing on the two core indicators of the development of advance business.And it will elaborate the development of advance business,analyze the main risks of advance business,put forward corresponding countermeasures,and look forward to the future development direction of China Steel Grid Corporation.I hope this paper can be helpful to China Steel Grid Corporation and domestic companies in the same industry.