The production of stainless steel ultra fine wires has developed rapidly over the past decade, with over 100 companies now engaged in this industry. Significant improvements have been made in product quality, variety, production processes, and equipment. The production capacity has shifted from being insufficient to exceeding demand. However, several issues persist, including unstable raw material
Current Status and Prospects of Ultra Fine Stainless Steel Wire Production and Market in China
Part Ⅱ
2. Current Status of the Ultra Fine Stainless Steel Wire Market
2.1 Supply and Demand Situation
In recent years, due to the impact of the global economic situation, export orders for mesh products have significantly decreased. However, domestic ultra fine stainless steel wire production has been increasing year by year, resulting in an oversupply and creating a buyer's market. Nevertheless, this situation varies somewhat across different regions, with supply and demand conditions differing slightly. Certain varieties and high-demand products still cannot fully meet the needs of the market.
2.2 Existing Problems
There is considerable dissatisfaction and strong reactions regarding the current ultra fine wire market. In summary, the issues are that the ultra fine wire market is abnormal, immature, and unregulated.
2.2.1 Disordered Competition and Lack of Proper Marketing Ethics in the Market
Competition is a crucial condition for the market to function, forming its essential element. In recent years, several phenomena detrimental to enterprise competition and industry development have emerged in the ultra fine wire market. Some enterprises are overly conservative, excessively emphasizing "trade secrets" and "technical secrets," prohibiting outsiders from visiting and learning. They refuse to exchange information and discuss technology with the outside world, isolating themselves. In reality, the ultra fine wire industry has developed to a point where there are few secrets or technical tricks left. Relative isolation does not benefit the common improvement and development of enterprises in the industry. Truly strong enterprises are those that are open and not conservative. A wise approach would be to embrace various ideas and learn from others, continuously improving and enhancing their overall strength, and constantly overcoming their own limitations.
Unfortunately, some regrettable actions have emerged around the ultra fine wire market. Some enterprises, to pursue their own interests, resort to harming others through deceitful means such as cheating, misleading, swindling, and defrauding. They sell substandard products as high-quality ones; replace ultra-low carbon stainless steel with low-carbon stainless steel; use materials of unclear origin and composition as genuine materials; refurbish and paint old equipment to sell as new; repair and polish old molds, then stamp them and sell as new molds; sell synthetic polycrystalline molds as high-priced natural diamond molds; and even sell ordinary stainless steel pipes as high-end heat-resistant steel pipes to users. These actions not only cause economic losses to users but also pollute the market environment, disrupt market order, and damage the market's image.
2.2.2 Price Chaos: Unfair and Unreasonable
Price is the link connecting supply and demand, the realization form of value, and a core element of the market, acting as a balancer of economic operations.
In the past decade, the ultra fine wire market has experienced three significant fluctuations. However, prices have only fallen, continuing to drop to almost the lowest historical levels. Compared to the first price drop, the average price has decreased by approximately 40%. This decline is not only due to the global economic situation caused by events such as the Asian financial crisis and the 9/11 attacks in the U.S., which reduced export volumes, but mainly due to the increase in domestic ultra fine wire production, creating a buyer's market and driving prices down.
The most noteworthy issue is not just the price drop but the price chaos. Generally, in a normal market economy, products of the same quality in the same region should have the same price, known as the "one price in the market" principle. However, in the current ultra fine wire market, there are multiple prices for the same product. There is no set price; pricing is neither quality-based nor fair but arbitrary and subject to drastic undercutting.
Some individuals collaborate to jointly suppress prices. Some exploit the situation by forcing unfair buying and selling practices, using tactics such as luring suppliers with high prices and then paying less upon receipt or not paying at all. When suppliers demand payment, these buyers behave shamelessly, justifying their arrears and refusing to pay even if they have the money, engaging in selfish and immoral behavior that undermines the interests of others. This phenomenon contributes to the instability of ultra fine wire enterprises.
Such behavior not only disrupts the functioning of the market economy but also degrades business ethics and social norms. The current ultra fine stainless steel wire market severely lacks integrity, facing a credibility crisis that leaves people confused, disoriented, and disappointed. There is a strong call for the return of integrity, the purification, and the regulation of the market.
3. Conclusion and Outlook
3.1 Current State and Future Potential
Despite the current oversupply and market slump in the ultra fine wire industry, this situation is temporary and part of the development process. There exists a significant latent market for ultra fine wire. With changes in the global economic landscape and rapid advancements in China's economy and technology, along with the emergence and growth of new industries, the application fields for ultra fine wire products will continue to expand. Consequently, the range of uses for ultra fine stainless steel wire will broaden, with more products of varying grades and types being applied across different sectors. Therefore, ultra fine wires remain a developing product, and the ultra fine wire industry is still evolving with promising prospects. We should remain confident in its future.
3.2 Importance of Production Challenges
The distinctive characteristics and numerous challenges of ultra fine wire production warrant sufficient attention from investors and operators. Producing high-quality, high-yield, and low-consumption ultra fine wire is influenced and constrained by various factors. Managers and producers must consider these comprehensively and analyze them thoroughly. Addressing only one aspect in isolation will not achieve the desired outcomes.
3.3 Need for Industry Policies and Standards
A feasible industry policy and corresponding regulations should be established to guide the production, operation, and development of the ultra fine wire industry, providing clear direction for investors. This will help investors gain a realistic understanding of the industry's current status and clarify its developmental direction.
3.4 Revision of Current Standards
Consider revising or partially amending the existing standard “Industrial Metal Wire for Mesh” (CB8605-88) and establish a separate standard for stainless steel ultra fine wires (less than Φ0.05mm) to serve as the basis for production, sales, and user inspection and acceptance.
3.5 Strengthening Enterprise Management
Enhance management practices within ultra fine wire enterprises. Given the unique nature of the ultra fine wire industry, each production company should develop a set of management and operational standards tailored to their specific circumstances. This will ensure that all aspects of production and operation are governed by clear guidelines, thereby improving industry management standards.
3.6 Equipment Upgrades
To elevate the overall equipment level of the ultra fine wire industry, consider selectively introducing advanced foreign equipment and related software. To maximize the benefits, it is essential to also import raw materials, molds, and mold repair and testing equipment. If funds are limited, prioritize the introduction of mold repair and testing equipment before acquiring the main production equipment.
3.7 Resolving Raw Material Issues Domestically
Address the raw material issues by selecting different smelting methods and setting varied prices based on the specifications and grades of ultra fine wires. This approach ensures the use of appropriate materials for different types of filaments and establishes corresponding price points. Such measures will bring significant changes to the production and pricing systems, leading to improved labor productivity and reduced mold consumption.
3.8 Market Regulation and Environment Purification
Create a lawful and orderly ultra fine wire stainless steel wire market environment through two main efforts:
1. **External Regulation**: This includes laws, regulations, industry rules, and agreements that enterprises must implement and adhere to.
2. **Self-Regulation**: This encompasses corporate ethics and moral standards, internal requirements that guide enterprise behavior. It is often said that "law is the power pillar of ethics, and ethics is the spiritual pillar of law." In terms of self-regulation and external regulation, external regulation is the power pillar of self-regulation, while self-regulation is the spiritual pillar of external regulation. An orderly market economy requires a comprehensive legal system for assurance and self-regulation by enterprises for realization. Enterprises must strictly self-regulate to ensure that laws are genuinely implemented.
Every enterprise should have its unique corporate culture, but "integrity" must be a universal behavioral norm. Corporate culture reflects the externalized spirit and character of entrepreneurs and leaders. Therefore, quickly enhancing the overall quality of entrepreneurs and enterprise leaders is an urgent task that warrants significant attention.