Efficient cooperation forms on the European market of metal parts and metal structures
02.08.2016
The metal products market can be splat in so called standard articles (usually bought by large industrial companies) and personalized articles (used generally by SMEs).
Customized metal parts represent more than 90% of the total market. In the last years, China started to become an active supplier on this segment as well. Even so, its market share here is still a small one. Therefore companies active in other developing regions continue to have real opportunities to communicate their offers for this particular niche.
The most relevant characteristics of the market that are going to be maintained on short and medium term are:
The European buyers are producers of articles for which series of customized parts & structures are needed
Intermediation has a low market share (5%). 75% of the entire distribution of such products is directly organized and 20% goes through agents.
The profit margins for customized articles is higher than in case of standard products, their level depending on the complexity degree and other risks implied by production outsourcing.
Chinese exporters are focusing more and more on the segment of personalized metal parts and structures
Until soon China gained an important market share while focusing on delivering standard products with an average profit margin. Even so, it appears that more and more companies will start entering on the market segment of customized articles.
This will create a stronger competition for others willing to do business in the same area. They will only have a chance if they will start investing in marketing and sales, while concentrating their production capacities on clear and specialized niches and while adapting their price and distribution strategies.
Standard products
The standard metal products represent about 10% of the total market of metal parts and structures. This segment is dominated by China, which leaves few opportunities to competitors from other developing regions.
The characteristics of this particular market segment will remain relatively unchanged for the next several years:
High completion between developing countries with direct repercussions on the price policies of those focusing on this particular sector
The European buyers are mainly intermediating on this segment and are rarely end using the products
Only a quarter of the European commerce with such products is direct delivery
Profit margins vary between 5-10% and 20% of the total sales price
