Large distributors are satisfied with a rise in profits, while small and medium ones are in agony over the decision on whether to continue business The phenomenon of 'the rich getting richer and the poor getting poorer' is being intensified in the distribution market for cold-rolled steel sheets (CR). The market structure is being reorganized in the wake of the prolonged supply shortage of CR and the diversification of the prices of distributors. Large-sized primary distributors are maintaining their businesses, helped by a rise in CR prices and an increase in their profit despite the supply shortage of CR. However, a substantial number of small and medium-sized distributors are in agony over a question on whether to their businesses with the difficulty in securing products to sell. Although the distribution profit margin rate for CR has gone up to the level of 10%, with some retail profit margin rates having surpassed such a level, small and medium-sized distributors have virtually nothing to sell. In addition, those distributors that have so far maintained distributorships for other CR makers, not POSCO, acquired commercial supremacy to a certain degree and performed the function of the primary distributors, are clearly seen scalingdown themselves to the secondary distributors. After all, the CR distribution market is being reorganized into a system for POSCO distributors' solo spurt, and those distributors who have not dealt in POSCO products became to lose their virtual function as the primary distributors. In addition, small and medium-sized distributors who have operated retail businesses with the materials purchased from these distributors are put in jeopardy of being forced out of business. The major reason for such differentiationarising among distributors is severe supply shortages of CR. Another reason lies in the weakened competitivenessamong the distributors of Hyundai HYSCO, Dongbu steel and Union Steel in the wake of the widened price gaps among those distributors after a recent high rise in CR prices. ‘The difference in base prices between CR produced by POSCO and those by other steelmakers has been widened to 50,000 won per ton at the maximum. non-POSCO products has widened a maximum over-50,000 won. What is more, not only POSCO, but also other CR makers sharply reduced their supply of CR to the distribution market. Competition among distributors in the market has virtually come to an end, and those distributors who did not handled POSCO products in the past have come to a position to buy some tonnage from POSCO distributors and sell them on a retail basis,‘said a president of a CR distributor who doest not deal in POSCO CR. sunhong@snmnews.com