Steel Buyers Basics: Painted Steel – Service Centers, Mills, Toll Processors & Paint Companies

Of the three main ways of procuring prepainted flat rolled steel described in my last article, buying from a service center is the simplest.  Service Centers will quote a price that can be compared apples to apples against one other.  In addition a good Service Center can consult on the correct specifications and will also handle your inventory, slitting and sheeting requirements.  In short the Service Center will manage the program for the steel buyer but in return, the Service Center commands a margin on the business and gets to keep any supplier rebates, which can be substantial.  More on rebates in a moment.

A painted steel deal becomes somewhat more complex when buying directly from a steel mill.  Steel mills will need complete specifications on both the steel and the paint required.  If the buyer specifies the paint he can also negotiate a direct rebate with the paint supplier based on the volume of painted steel (and perhaps the type and color of paint).  Pricing then becomes a matter of the delivered cost of the painted steel plus whatever rebate the paint company is willing to give.  Furthermore, Steel Mills that paint their own steel (like Steel Dynamics, Ternium or Steelscape) will often give the buyer an additional rebate based on the volume of painted coil.