Analysis Of Chinese Economic Fluctuations Impact On Steel Inventory Investment

As the basic raw material industry, stable operation of iron and steel industry has an important impact on the economic development of our country. In recent years, steel inventory investment increasing impact on the industry supply and demand. Study the steel inventory investment external shocks, has important theoretical and practical significance. Corresponding policy can be used to stabilize the market expectations and slow steel inventory investment volatility. When the price of steel can correctly reflect the product supply and demand, the production and operation of the upstream and downstream enterprises can get better arrangement, decision-making departments can more accurately grasp the prospects of the development of the iron and steel industry. Through studying the impact of economic fluctuation on steel inventory investment in this paper, to a certain extent added to the domestic research on inventory investment external shocks.First of all, this paper introduces the research status quo of economic fluctuation relationship with inventory investment, and draw out the main problem to solve. Then, through analyzing the characteristic of China’s economic fluctuation, iron and steel industry present situation and the characteristics of steel inventory investment, the mechanism of economic fluctuations impact on inventory investment is deduced. Finally, further analyze the influence of economic factors on China’s steel inventory investment, and carry on empirical test. In this paper, main conclusions are as follows:(1) China’s iron and steel industry inventory investment in general showing characteristics of "procyclical". (2) Sales department with higher degree of market izat ion is more sensitive than the steel mills to economic fluctuation. (3) In addition to the economic cycle, the product price and the cost of capital will also have great impact on inventory investment of sales department.The innovation of this paper lies in:(1) Using monthly data for analysis. Previous studies usually use annual and quarterly data, easy to ignore some important information. (2) The past research mainly concentrated in the inventory investment of production department. This paper joins the sales department into analysis framework. (3) In addition to the economic cycle, the product price and cost of capital will be added to the empirical analysis on the exogenous shock of the steel inventory investment.