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This is as the country’s steel industry is severely oversupplied and even high-end products are affected as most are of similar quality.

“Chinese steelmakers will continue to struggle for profits given that the growth in capacity has outpaced that in downstream demand. Thus, we should change our sales strategy and care more about the customer to strengthen market competitiveness. This includes involving customers in the development of steel products according to their requirements and setting up service centres in locations closer to them,” Huang said at an industry conference on Thursday March 27.

Baosteel is a good example of this, he pointed out.

The country’s largest auto sheet producer has been focusing on serving customers in the automotive industry and has set up over 50 coil centres throughout the country, with a combined processing capacity of more than 7 million tpy.

The eastern Chinese steelmaker posted a sales revenue increase of about 40% while its average selling prices only dipped 1.5% last year, thanks to stable orders and its strong pricing ability, Wang Jing, Baosteel’s vp, said at the same conference.

Wisco is already following in Baosteel’s footsteps.

In July 2013, it completed a takeover of ThyssenKrupp’s tailor-welded blanks business in a bid to enhance its competitiveness in the global auto steel market with advanced technology.

It set up a united auto steel laboratory with China’s Chery Motors in 2011 and another one with Shenlong Motors in 2012.

These can help Wisco maintain long-term relationships with these end-users and lock in orders in advance, a source at the mill told Steel First.

It also plans to set up more coil centres in major automaking hubs, including in eastern China’s Changshu and Hangzhou cities, to better serve local clients.