2. Due to insufficient purchasing funds, steel traders need to raise funds from pallets. Pallets buy steel from steel mills and pay in advance, and then sell them on credit to steel traders and instruct steel mills to deliver the goods to steel traders. Steel traders finally pay pallets.
3. When there is no real demand for purchase and sale, the steel mill will arrange the steel trader to entrust the pallet to purchase from the steel mill, and the steel mill will use the money from the pallet for other purposes after receiving it. When the steel trader needs to pay, the steel mill will directly transfer the funds to the steel trader and then pay to the pallet, which will withdraw the funds and make a profit;
4. After the steel mill raises funds in the form of pallets, if the enterprise benefits well and can afford the profits paid to the pallets, the pallet transaction can be operated circularly. However, once the steel mills lose money, they will not be able to pay for the pallets. At this time, some steel mills will look for the second pallet as the downstream buyer of the original pallet and pay for it to maintain the trading cycle and enterprise operation.