Economy
The Chinese Grinch Who Stole…
Written by John Packard
December 23, 2016
This article should go into one of our Steel Buyers Basics series of articles under the heading “Buyer Beware” or, “If it is too Good to be True….”
The following article is from one of our trading contacts with whom our SMU Publisher had done business during his trading career. The trader is located in the Far East:
Here we go, one of our regular cold rolled coil (CRC) and hot rolled coil (HRC) buyers in SE Asia advised us they wanted to purchase 5000/mts of CRC about 3 weeks ago and they were holding an offer already from a “Trader” and our price would have to be very competitive as that cargo in hand was for prompt shipment. We of course offered direct from the mill vs Trader, and yes we were, as the buyer said, way over the offer he had in hand by USD45-50/mt, and his offer was via CY shipment [Container Yard to Container Yard] instead of Bulk which I thought strange as there are normal bulk shipments from China, but just said to the buyer, by the way which is a quite large buyer, “Hard to contemplate how we are so high from a mill offer vs from a Trader and prompt shipment”. He replied, let’s try on next requirement and a simple OK was our answer.
He sends me email some days later that the LC opened and cargo shipped via containers and all in order… Perfect execution by the Trader, and by the way, one I had never heard of by name. I congratulated him on the purchase of CRC USD45-50/mt and still getting delivery as Chinese norms would be cancel the order or re-neg on the price, but his shipment went unscathed.
Yesterday, he calls me and asked me if I could assist in locating the Trader for that cargo as no one at their offices were answering the phone or replying to emails, and he sent me the info for this company which we could not locate, no other steel partners we know knew of this company etc… I asked the buyer what the problem was and he sent me the 3 photos attached (now you can open the attachments John).
I thought I had seen everything in the steel business but this Takes the Cake John!! The Seller loaded 5000mts of Cement coils in Containers!! Can you imagine the ingenuity to complete such a fraudulent task???
My mouth dropped to say the least and the Moral of “You get what you pay for” came to mind… People should know you don’t buy such large quantities of flats from China via CY shipment and also on a CNF CY basis!! [CNF = Cost and Freight with no insurance. CIF = Cost, Insurance and Freight]
Buyer never saw what was coming as the deal was just too good…
China never ceases to amaze me….
John Packard
Read more from John PackardLatest in Economy
New York state manufacturing activity ramps up to multi-year high
New York state’s manufacturing sector saw substantial recovery in November, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.
CRU: Dollar and bond yields rise, metal prices fall as Trump wins election
Donald Trump has won the US presidential election. The Republican party has re-taken control of the Senate. Votes are still being counted in many tight congressional races. But based on results so far, the Republicans seem likely to maintain control of the House of Representatives. If confirmed, this will give Trump considerable scope to pass legislation pursuing his agenda. What this means for US policy is not immediately obvious. Trump will not be inaugurated until Jan. 20. In the coming weeks and months, he will begin to assemble his cabinet, which may give a clearer signal on his policy priorities and approaches. Based on statements he made during the presidential campaign, we have set out the likely direction of his economic policy here and green policy here.
ISM: Manufacturing index fell in Oct to lowest point of ’24
Domestic manufacturing contracted for the seventh straight month in October, according to the latest report from the Institute for Supply Management (ISM). This marks the 23rd time in the last 24 months that it has been in contraction.
Chicago Business Barometer slips in October
The Chicago Business Barometer fell to a five-month low in October and continues to indicate deteriorating business conditions, according to Market News International (MNI) and the Institute for Supply Management (ISM).
Final Thoughts
We all know the American news cycle moves pretty fast. Viral today, cached tomorrow. So it is with the US presidential election on Tuesday, Nov. 5. People have election fatigue. They've moved on to other things like planning holiday parties, debating Super Bowl hopefuls, or even starting to look forward to our Tampa Steel Conference in February.