Steel trading companies need to prepare at least three times the amount of funds to do a business, so they are highly dependent on bank financing. In the field of procurement, banks provide financing with a high credit ratio, during the inventory stage, banks provide financing for pledged goods, and in the field of sales Banks provide financing for deposit orders, but their monitoring of the results of the trade link, especially the transportation and warehousing link, is very weak. Vicious competition has given steel trading companies a dominant position, because when they withdraw funds, they can bring back huge amounts of money to the bank. deposit. Some people from Fujian who are engaged in steel trading have found an opportunity to take advantage of it. The problem of repeated pledges of inventory gradually arises. Financing at every stage can easily lead to repeated financing, false financing, etc. A few years ago, when steel prices plummeted and some steel trading companies encountered serious financial difficulties, "predecessors" such as China CITIC Bank and Minsheng Bank began to "pay" billions of dollars in "compensations". Other banking institutions that followed this type of business are still Continuously attack the risk control line of defense with courage, and in order to achieve performance growth, continue to invest a large amount of credit funds into this industry against their will. As a result, regional and industry steel trade financing risks have been staged from last year to the beginning of the year, and the risks have long been The triangle spread to the Fujian River Delta and the Pearl River Delta. So far, banks have changed their minds when it comes to steel trade financing, shook their heads and walked away.