Steel Products

SMU Newbie - Day 2: Steel 101 Marketing Fundamentals

Written by Sandy Williams

Written by: Sandy Williams

Day one of the SMU Steel 101: Introduction to Steelmaking & Market Fundamentals workshop ended by rubbing shoulders with our mill hosts at a cocktail party at our hotel. This was my first opportunity to speak to the General Manager of the Severstal Columbus plant as well as a number of his support staff who came out in force to meet and speak to those in our workshop. This was one of the subtle ways Steel Market Update introduced important concepts to those attending the workshop. Networking is part of the personal side of being in the business and a key component of the industry.

A breakfast with sweet tea, biscuits and gravy and we headed for day two of Steel 101 in Starkville, Mississippi. The second day began with an overview of long products and how they are produced. We covered everything from SBQ to wire rod, as well as the chemical composition of steel itself.

How steel is priced proved to be a riveting topic for just about everyone in the workshop. With steel mills announcing price increases as we sat in our classroom, the issue couldn’t be timelier. Students wanted to know: What are the signs that a price increase is imminent? What are price indexes based on? How do fluctuations in raw material pricing affect steel prices? How are lead times affected during a price increase? How does the economy affect pricing? The conversation gave us new insight into why steel prices can fluctuate as much as they do.

How to buy and sell steel was more confusing for me since my work is only on the periphery of the steel market. FOBs and nominal and theoretical weights are a bit more than I care to know about, but for many of the sales peoples in the workshop this is what they came for. The discussion included how to calculate a price, what add-ons and discounts to look for, billing methods, understanding gauges (thickness of steel referenced by manufacturers standard gauge through the use of a single number), how and when to file a claim and a host of other relevant topics. Our instructors even mentioned the softer side of selling—developing relationships and trust.

We ended the day with a look at the fundamentals of steel–where is it used, advantages and disadvantages of steel, and competing materials. We looked at how supply and demand affect prices and consumption domestically and abroad. We discussed how global economies and currencies impact steel production and demand.

The fact that the PowerPoint for day two had over 250 slides may give you a better idea of the magnitude of information that was imparted. Credit must be given to the instructors, John Eckstein, John Packard, Peter Wright and Steve Painter (as shown in photo), for the phenomenal job they did explaining the steel industry in a way that even a relative “newbie” could understand—and I would say that even if I didn’t work for SMU. The survey responses following the workshop were unanimously positive. Here are few samples:

The workshop is excellent! This workshop really touches the basics that everyone needs to know from amateurs to professionals in the steel market. A LOT of useful info was given and I know have ways that I can look up and see how the US and world economies are performing and how their performance impacts the steel market. I enjoyed this class very much!

Obviously the mill tour was awesome. Aside from that, I was very happy with the various subjects touched on as they relate to what I do. I feel like I have some very useful knowledge that I can apply daily in my work.

I feel as though the Steel Making 101 workshop was a terrific opportunity for the experienced and non-experienced alike. I feel as though there is something to be learned for us all in an industry that continues to grow.

Well that ends this series–thanks for reading my workshop ramblings. Steel 101 was an excellent way to learn about the industry and to experience a mill operation first hand. I hope you’ll join us for the next one—I know you’ll like it! (By the way – that’s me with the hat a little askew in the front row…)

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