The importance of unchangeable competition factors research

As the basic row material, the price of steel products is one of the most important factors. And the cost is the basis of price competition. In the history of steel industry technology progress, many great breakthrough of technology, such as direct reduced iron, converter steel making, continuous casting, continuous rolling, thin slab casting and rolling, pulverized coal injection into blast furnace and so on, the primary reason is the cost reduction, “cost is superior to strategy” used to be and also will be the preferred manage strategy of steel industry for a long term.The cost is related to the process, technique and management. They are the changeable factors of enterprises. Through the cost comparison and analysis, it’s quite convenient to tap the potential through the technology advance and management improvement.In the long run, the diversity of process, technique and management will disappear with the integration of different enterprises. Cost competition for long time will finally depend on the outer environment the enterprises involved, such as raw materials, energy, HR cost, fund cost and market. These factors are called unchangeable factors. Under market economy, the unchangeable factors are the main factors affecting the production layout. Our steel manufacturing ability gradually concentrating in coastal area, raw material producing area and areas with large market just proved so. Withe development of global economy, unchangeable competition is going to be a great factor to affect international diversion of labor.As a result, the cost competition research is not only of great significance to reduce the cost for the short term but also have important reference value to make long term development strategy and improve the international competition of our iron and steel industry especially seamless steel pipe and welded steel pipe industry.