Everything to Know about Sourcing Metal Products from China

2021-08-18

插图1.jpgThe rapid industrialization of China's economy has increased the steel production in China, causing the prices of metal products made in China to decrease substantially compared to other countries. This decreased cost began when the steel industry started taking off after 1978 under rigorous economic development.

We know that metal products are the raw materials for many other industries, be it the electronic industry, automobile industry, or home appliance industry. By 2011, China became the largest steel producer supplying 45% of the world's steel. These statistics and background are meant to reassure you that sourcing metal products made in China are a good and profitable decision to pursue.

We know sourcing metal products may seem tedious due to the nature of the product and the investment required. However, the return on sourcing metal products is much higher than in any other product category. The process of sourcing metal products can seem quite confusing, with small businesses jumping on the bandwagon of creating a profit by selling metal products in different parts of the world. What may help ease your worry is that not only is steel production affordable in China, but it is also massive, meaning that there is a share for everyone to get a hand on. Did you know that in 2008, China was the top exporter of steel? That means they were producing the most amount of metal products.

So let's get started on different types of metals manufactured in China.

Types of Metals with a High Price and High Demand in China

If you are looking to source Chinese metal products as raw materials, perhaps you may want to read this section that focuses on the different types of imported metals that are massively manufactured in China at a fraction of cost. Some metals are not produced or discovered in China; in fact, China tends to import raw forms of metals from other Asian countries like Indonesia for nickel which is then refined and used to create stainless steel products. Here is a list of raw materials used to make metal products that affect their prices:

Iron Ore

You may think iron ore is local to China. But it isn't; every year, China imports more than one billion metric tons to fulfill its needs making it one of the largest importers. So the steel or metal products made in China that you source most likely contain iron ore in them that is imported from other countries by China. This is one metal raw material that you can import from China and use in appliances, gadgets, and even in construction materials. As a result, you may find prices of products made from iron ore to be slightly higher than other metal products because iron is imported.

Copper

The Chinese economy is heavily dependent on copper. So any metal product you source having copper in it will likely be easier to obtain because of the government's efforts. Due to the rising copper shortage, copper-based metal products may be a little costly to obtain, which means you might need to keep a reduced profit margin. Or, in case you do get copper metal products at a good price, you can't depend on the same price to remain stable for a long time.

Nickel

Nickel is also imported from Indonesia by the Chinese steel industry. This is because two-thirds of the world's nickel supply is used to make stainless steel which is extremely popular for home appliances, especially pots and fry pans. With such a high demand for nickel, stainless steel may also be a very great choice to source from China. However, you do need to bear in mind that the price can increase at any time because the demand exceeds the supply.

插图2.JPGDifferent Industries that Use Chinese Metal Products

Chinese metal products are an important raw material or semi-material to certain profitable industries. By profitable, we mean that you can source products from different categories that are made from metal or include it as a component. This is for those looking to source products from a supplier rather than from a manufacturer or a factory. The main industries that use metal products made in China are:

Automobile Industry

Vehicles such as cars, motorcycles, or trucks all use some form of metal products. So if you are looking to source any of these products, this is one of the product industries to check out - moreover, it is not just the automobiles and their parts that are a lucrative business opportunity. But car maintenance and accessories are also some of the Chinese metal products that you can source. It is no secret that car maintenance is expensive, but what China has done through its economic policies is that it has reduced the cost inviting people like you to buy their metal products at a reduced price.

Electronic Industry

This is one industry that you may already be aware of. With the role and dependency that we have on technology and gadgets, we increasingly rely on metal products to fulfill our day-to-day needs. There is a huge business opportunity of sourcing metal products for the electronic industry from China. From smartphones, laptops, and tablets as electronic gadgets to home appliances such as televisions, air conditioners, or refrigerators. Each of them has some part of metal making up their structure.

However, if you aren't interested in any of these two options, another market within the electronic industry has risen in demand due to current circumstances; medical equipment. Medical machines and accessories used in hospitals or clinics are in high demand, and they are also produced massively in China at a fraction of a cost. Due to the increased danger of contracting diseases, getting injuries, and the world becoming more self-aware about proper healthcare (recently due to Covid-19), medical equipment made of Chinese metal products has increased in demand worldwide. This is one category where sourcing these types of metal products will be beneficial to your business.

Aircraft Industry

Perhaps one of the biggest users of metal products is aircraft and their related parts. It may sound unattainable it is totally achievable to start a business based on this. New aircraft parts are always in demand, it is easier and much cheaper to replace a part of an aircraft with a new one than to buy a brand new plane. This is the reason why this industry is so heavily reliant on Chinese metal products. Many aircraft companies continue to take advantage and leverage China's metal production capabilities simply because it costs them way less and gets skilled labor or manufacturing.

So now that your mind is decided which industry you want to dive into, let's focus on which region should be your focus for sourcing metal products made in China.

Where to Look for Metal Products made in China?

The one thing you should know about product sourcing from China is that manufacturing factories and suppliers of a particular product are concentrated in one region, either due to the fact of having labor that is skilled in the production of that particular good or due to favorable conditions.

So when it comes to Chinese metal products, the number one region in China for metal manufacturing is Hebei. Hebei is a very close province to the capital of the country; Beijing has produced 191 million tons of steel in the year 2017. Hebei Iron & Steel and Tangshan Guofeng Iron & Steel are the top manufacturers of metal products within this region. So, if you are looking for a supplier or manufacturer of iron or steel-based metal products, you might want to check one of these two manufacturers based in this region.

However, in case Hebei is not your top choice for sourcing metal products, then Shanghai is another region to look into. The municipality Shanghai is located on the eastern coast of China. One of the top manufacturers and suppliers in the Shanghai region is the Shanghai Metal Corporation (SMC).  Established in 1980, SMC deals with many metal products, starting from electronic gadgets, medical equipment, construction machinery, engineering procurement construction, and even other metal machinery.

Along with Shanghai, Sichuan is another region on the western side of the country that is famous for being the largest steel manufacturer in western China. Other than Shanghai and Sichuan, which we consider as the runner-ups in the Chinese metal manufacturing industry. A few other options are to check out Shandong, located in the south of Hebei, and the region in Xinjiang in northwestern China.

Knowing the regions where metal manufacturing is popular helps you to pinpoint and narrow the list of suppliers. Be it online or a physical visit to China, knowing the region for metal production helps you to avoid scams at the hands of a sourcing agent or agency that might try to deliver you a substandard order.  

插图3.jpgHow to Find and Work with a Chinese Metal Supplier?

Looking for a Chinese metal supplier is a little bit more complex than looking for other products. This is because metal products are a long-term investment for your target audience, and hence, they do create a dent in your funds despite the reduced price that you are sourcing them at. Here quality matters which should reflect in the type of supplier that you are making your business partner.

Step 1: Create a List of Metal Product Suppliers Based on Regions

This won't come as a surprise as we have been building up to this point. Finding good and reliable metal product suppliers depends on which region they are located in because the chances are that they will have good manufacturers and will be able to procure you high-quality metal products from the heart of the leading regions. After all, there is a concept of specialization, and you would obviously want your metal products to be manufactured in regions that specialize in them. This is one way of creating a list of potential suppliers, and it also applies to online platforms.

Step 2: Check Credentials of the Supplier against your Target Audience

Simply choosing a supplier based on region is not enough; scams can occur anywhere, and hence, care must be taken before you sign a contract with any supplier or sourcing agent. What you should be looking for is the experience of the supplier or the Chinese factory that will be manufacturing your metal products. You should also be looking at the quality and standard of metal products they are producing and whether they will satisfy your target audience. In China, there is also a concept of MOQ, which is the minimum order quantity that decides the volume of your order. If you are going for a highly specialized metal product, you may want to order below MOQ, which can cause some manufacturers and suppliers to back off. Some suppliers or factories tend to outsource some of their work to other factories. In that case, you should be focusing on where those factories are located and their quality standards.

Step 3: Check Quality Standards and Pricing

Ethical guidelines in the Chinese production system are a little different from the regulation followed in other countries. For starters, quality control is not prioritized that much in Chinese production processes. That means you have to either hire someone or make regular audits of the factory where your product is being manufactured. The reputation of your metal products can be easily tarnished if they do not comply with the quality control regulations of the country you are selling them in.

On the other hand, pitching the idea of quality control will also let you know which supplier or Chinese factory would be willing to work with you. Some of them might back off at the thought of being audited because they are not willing to customize their production processes to meet the quality standards that you outline to them. You see, in Chinese metal factories, there is never a proper check on the quality of raw materials that enter the production process. So once you receive the final product, the damage has already been done because a final metal product cannot be returned to its original form.

Step 4: Help your Supplier or Metal Manufacturer Optimize the Metal Production

A good way of dealing with this matter of having suppliers or factories unwilling to cooperate with audits is to suggest how they can reduce their costs yet maintain their quality. This is a kind of reverse psychology that involves a little bit of negotiation. But, this approach goes a long way in earning you the loyalty of your supplier. By helping your supplier reduce their costs, they are more likely to supply you only with their metal products. Your supplier will most likely only listen if they want to work directly with you instead of supplying the same metal products to your competitors as well.

This step can be achieved by keeping small targets that can range from reducing price, improving quality, or producing small batches to reach the future state. This will allow your supplier's team to have achievable goals to work towards, enabling them to reach that point much quicker.

Step 5: Know your Import Qualifications for the Country You Aim to Sell In

This step may seem out of the norm for working with a Chinese metal supplier in the section. But it is your eventual step forward, so keep this in mind when looking for a Chinese metal manufacturer. Some countries require you to obtain an import qualification to avoid getting in trouble with the local government. However, in some countries, the process of getting an import qualification may be tedious. In this case, hiring a sourcing company as your import agent can help ease your troubles for a minimal fee. However, we do suggest reading about your government's directives on importing metal from China since many countries imposed an anti-dumping tax on Chinese metal products.

Final Thoughts

Sourcing metal products made in China is a great business opportunity since the country is ranked at the top for the production of raw steel materials and metal parts. Due to their skilled labor and reduced production costs, the price you pay against the bulk order you receive of metal products is way lesser than getting it from a distributor in your home country. Mass mechanical production allows Chinese factories to keep their costs low despite the rising demand for metal products.

At Maple Sourcing, we believe in providing you with a range of services for sourcing metal products made in China. We have qualified manufacturers as well as we offer services of order monitoring to ensure that the order you place is delivered safely to you without much hassle.  

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