Steel Supply Chain Finance And Risk Control

In recent years, the steel supply chain finance business has been booming in China. It alleviates the financial pressure on the steel industry, while optimizing the operational efficiency of the steel supply chain, and reducing the operation cost. Bank combines loans and loan business through the supply chain management company, on the one hand, reducing the default rate of loans and expanding the scope of services, on the other hand, improving its own profitability for the extensive use of bills. Some supply chain management companies have developed rapidly relying on the steel supply chain finance business. However, the increasing risks of the steel supply chain finance business hinder the development of this business model, especially the credit risk. For example, who can cooperate? And can supply chain management companies give those cooperative enterprises receivables and prepayments? Such problems need to be solved urgently. Therefore, building financial risk evaluation system of the steel supply chain to reduce credit risk is particularly important.Firstly,based on the related theory summarized and combined with my practical work experience, this paper analyzes the current situation in the steel industry, extract the business model of the steel supply chain finance, and summarizes the associated risks. Secondly, analyzing the measurement methods of the steel supply chain finance credit risk refer to previous studies, and setting up the evaluation index. In this paper, using principal component analysis and logistic regression analysis to establish a risk measurement model, using data from A company to verify the feasibility of the new model. Finally, the paper puts forward some relevant countermeasures and suggestions in the view of the steel supply chain financial risk management, from the perspective of supply chain management and the macro level. I hope that this paper can play a certain value on the development of China’s steel supply chain financial services.