Journey 1995:Non-Stop

Chapter 408 Thoughts on the Airplane

In early September, after finishing his urgent business, Yan Hui took his family back to southern Fujian.

My mother, grandmother, older sister, younger sister, and nephew (my sister's son) all came back with me. Everything in the house is renovated and has been airing out for a while. Recently, my father has been working on the yard and building a small fish pond. Because the land isn't big enough, and we need to make sure the yard can park two or three cars, the fish pond is only two square meters.

My father hasn't lived in this house for even a single day. He has to wait until everyone in the family comes back, sets off firecrackers, and has a meal before he can officially move in. This is the first house in the village to have an elevator, and it's very famous in the surrounding villages.

Before returning, Yan Hui had his company contact a car rental company to arrange a Coaster bus and also hired a driver.

This was my nephew's "first time" on an airplane, and he seemed very excited.

When Yan Hui first arrived in Jinan, his nephew was just four years old, a tiny little thing who had just started kindergarten. Now, his nephew is in junior high school and is a fairly sensible child.

My brother-in-law has many social engagements, so my sister takes care of everything at home. Her mild-mannered personality has had a significant influence on her nephew, giving this 12-year-old a somewhat composed demeanor. However, no matter how composed he is, he is still a 12-year-old boy, and he was still jumping around excitedly on his first airplane ride.

“Actually, this is your second time flying. I remember you flew back to southern Fujian in 98 when your grandfather was still alive. But you were only two years old then,” Yan Hui said.

"Oh? Really? Mom!" The nephew looked at his mother. "Did I ride in an airplane when I was two years old?"

"Mm." The older sister nodded.

Since Grandpa passed away, my sister has never taken my nephew back home for Chinese New Year. Every time my nephew goes back, he takes the train.

My brother-in-law's business has been doing well these past few years, but my sister has always been a frugal person; she never spends money recklessly.

"See? I told you so!" Yan Hui said with a smile. "Hold on tight for a bit."

"Uncle, won't this be very bumpy?" The nephew's seat was right by the window, and he looked outside with a mixture of anticipation and fear.

"No, it'll be fine," Yan Hui laughed. "Fasten your seatbelt. We're taking off soon. I'm going to get some sleep; we had a meeting until 4 a.m. last night."

"Okay, you can rest first." The nephew nodded understandingly.

The older sister, who was sitting in front of Yan Hui, heard this and called out to the flight attendant, asking Yan Hui for a blanket.

Yan Hui plans to go to Brazil in November and, on his way back, take his family on a shopping trip to Tokyo. He's been in frequent contact with people in Brazil lately and has been staying up very late; he desperately needs rest. There's no signal on the plane, so Yan Hui always uses flights to catch up on sleep.

With his eyes closed, Yan Hui recalled the conversation he had last night.

The impact of the subprime mortgage crisis is becoming increasingly severe, significantly affecting international trade. Previously, Yan Hui didn't understand what the subprime mortgage crisis meant, but now, with Sun Lei by his side, he naturally has a deep understanding of these financial terms.

In the first half of this year, until July, the prices of raw materials such as iron ore and coking coal surged, coupled with strong domestic and international demand for steel, leading to a continuous rise in steel prices. Yan Hui didn't make much money from this surge because his orders were based on market prices at the time of delivery, allowing him only a limited profit. He earned about 60-80 yuan per ton of steel.

However, some secondary agents and retailers who stockpiled steel in advance made a lot of money. When the price of steel rose by several hundred yuan, they earned several hundred yuan more per ton.

In the past few months, the price of rebar has skyrocketed by more than 1,000 yuan per ton! Some people have really made a fortune.

Yan Hui adhered to his principles, having previously agreed not to engage in risky transactions for a year, and he was determined to strictly abide by them. He began his investigation around this time last year, then entered the steel trading market in November. Now it's September, and he has been in the industry for almost a year, witnessing many market ups and downs. It's time for him to engage in some risky trading.

Recently, he obtained several pieces of information.

First, starting in July, domestic steel inventories began to increase, with some steel mills slightly reducing their production capacity and accumulating more and more steel stocks.

Secondly, steel prices peaked in July this year and have been fluctuating frequently since then, but have not shown any further upward trend.

Third, the subprime crisis has caused turmoil in many foreign companies and hindered foreign trade. As a steel exporter, China may also face export difficulties.

Fourth, the surge in iron ore prices in the first half of the year led to increased production capacity in regions such as Brazil and Australia, and production capacity remained high in July and August.

In light of this information, Yan Hui believes that another rise in steel prices is unlikely. The fluctuations in July and August were likely caused by some distributors stockpiling steel; otherwise, prices should have fallen during those months.

In other words, the sharp rise in prices in the first half of the year made many people money, and they believed that this trend would continue, so they began to hoard steel.

Yan Hui viewed these as very dangerous signs.

Yan Hui and Sun Lei have analyzed several financial crises and ultimately reached the following conclusions:

First, the current stockpiling of steel in the market is nearing its limit, while the market's absorption capacity is insufficient, and steel prices are approaching recent highs.

Second, the financial crisis will rapidly impact global trade, and a further consequence of this crisis is a sharp contraction in trade volume. This will lead to a large number of shipowners being unable to secure shipping orders, resulting in a sharp drop in freight rates. Once freight rates plummet, the price of commodities like iron ore, which have a high freight cost ratio, will inevitably follow suit, leading to a sharp drop in the import price of iron ore, and subsequently, a sharp drop in steel prices.

Although there is no storm yet, Yan Hui can already sense that a storm is brewing.

With banking professionals as advisors, overseas information channels, and his nearly year-long observation of the steel market, he made his final decision.

After getting off the plane, everyone excitedly headed towards the exit. Qinglan excitedly came over and called Yan Hui to get off the plane together. Yan Hui said to her, "After you take care of Grandma and everyone else, I need to find a quiet place to have a meeting."

"Huh? You still have work to do? Brother, isn't it a bit of a rush?" Qinglan asked, a little unhappy.

"No, it's something very important." The things Yan Hui had just been thinking about with his eyes closed were extremely important, and time was of the essence.

"Okay, I'll make the arrangements." Qinglan could easily handle these tasks.

Yan Hui followed the crowd out the door, immediately found a relatively quiet spot, and called Zhou Ping, asking him to contact Wang Yongjun and Sun Lei.

Five minutes later, a conference call was held.

The so-called conference call was actually Zhou Ping using two landlines to call Sun Lei and Wang Yongjun, then putting them on speakerphone, while simultaneously talking to Yan Hui on his cell phone to ensure everyone could hear what Yan Hui was saying.

(End of this chapter)