A Study On The Bidding Strategy Of China Steel Trade Enterprises

As a kind of traditional materials, steel has a very strong function; it is a strategic structure material. Steel trade and the development of steel industry are able to directly affect the economic situation of a country. Steel industry is the basic industry of the country, which provides an indispensable "industrial food" for every country. Steel is the "blood" in the national industrial system, and it is the material basis of the national modernization.Global steel market continued unrest in 2014, but the steel production has created a new record. In 2014, global crude steel production reached a total of 1.665 billion tons, an increase of 1% compared to 2013. Although steel supply continues to increase, steel demand has no obvious growth trend, the growth rate of demand is extremely slow, and the market demand for steel almost has reached saturation state. Worldwide steel production overcapacity, the demand for steel is not far from the increase in the supply, steel supply and demand lost equilibration. According to the principle of microeconomics, product supply is greater than demand will inevitably lead to a decline in prices, and the trend of international steel price index (CRU index) has been confirmed the fact of steel price fell. In recent years, China steel industry’s PMI composite index continually decrease, the data has been reduced to 50% critical line, and the 2015 data is less than 40%. These phenomena implied that China steel industry and steel trade market came into a downward track, structural imbalance between supply and demand caused steel price down, costs of steel trade increased, steel market competition intensified. China’s current steel trade mainly in the way of bidding, so how to keep a higher bid rate and a higher steel sales in this slightly weak market environment is particularly important.In this paper, we analyzed a successful case of "BJ company bid for the project of Chengdu-Guiyang High Speed Railway" from two perspectives of the tender and the bidder, and summed up this company’s success factors and shortcomings in order to provide guidance for the other steel trade companies in the form of material bidding.This study found that the way of bidding for the steel trade is facing a revolution; the evaluation criteria are changing. The traditional lowest price bid mode is no longer able to adapt to the development of the market. Price is still an important factor affecting the bid activities, but it is no longer a determining factor, multi-aspects, multi-angle and multi-factor comprehensive evaluation model has become the mainstream. Steel trade market competition is more and more fierce, steel trade companies should to improve the existing bidding strategy to enhance their own competitive advantage. Bidder must clearly examine the market situation and meditate their operating conditions, keep a harmonious trade relationship with tender, do not covet the immediate petty profits, focus on the long-term development of enterprises, formulate diversified bidding strategies, and then achieve the maximization of economic benefits and social benefits.