The so-called cyclicality of the industry refers to the cyclical fluctuations in the scale and profitability of the industry.
And this cycle is long enough in time span, and in a long enough time period, there are troughs, high tides, development and recession.
Cyclicality is an adjustment mechanism of prices and an adaptation of individuals to the whole.
When the downstream demand for steel increases, the price of steel rises, the profit of steel enterprises increases, and the breakeven of marginal production changes.
Iron and steel enterprises increase production capacity, and the increase in supply leads to a decline in steel prices and a reduction in profit margins of iron and steel enterprises.
At this time, downstream demand decreases, steel prices drop, and the backward marginal production capacity of enterprises is facing elimination, supply is less, prices stabilize, and profit margins rebound.
