Steel Products

Final Thoughts

February 15, 2013

The American Institute for International Steel (AIIS) put out there monthly newsletter to their members today (Thursday) and they had an excellent article on the Conflict Minerals Act which has a potential to impact steel mills, trading companies, service centers and manufacturing companies (publically traded). They recommended reading what Metal Miner (www.agmetalminer.com) had on their website on the subject.

Our articles regarding service center support – or lack of support – of price increases has prompted a slew of emails and phone calls (including the letter to the editor above). I have received comments from service centers and manufacturing companies. One manufacturing company sent the following email which I found to be interesting – and maybe of interest to the service centers out there: “Wow, two kudos in a week! Excellent thoughts & information in the previous publication on the pricing cycle and the follow up article yesterday…I’m starting to understand more about the various techniques for pricing / inventory value for service centers…something that has been on my mind these last couple years!”

The term “value” came up in a number of the emails and phone conversations. There were discussions about “value propositions” as well as “value food chain” and “understanding value.” I have a number of ideas for articles regarding the subject.

I also learned quite a bit about contract pricing, CRU minus deals, spot pricing and how to “beat the system.” We will have more regarding this topic as I build up my data on the subject. Look for some questions in our next steel survey which will begin on Monday of next week.

Interaction with the steel community is an important part of our function as an organization. I have over 30 years of active steel experience within the industry and many of those within the SMU team have steel experience. My desire is to report and analyze events but, I want to also encourage the industry to discuss topics of importance – whether through SMU, with your suppliers or customers directly or within your organization.

We anticipate there will be many opinions and what may work for one company may have little or no value to another. In Sunday’s night’s issue I will discuss the view of one company executive who expressed his frustration when he told me, “Pricing is hard work…and it should be hard work…”

Until then – your comments, ideas and business are all truly appreciated.