Steel Buyers Basics: Defective Steel

For the last couple of weeks we have been discussing various kinds of ethical issues that come up in the steel business.  This week we will deal with the issue of when flat rolled steel is rejectable.  Buyers and sellers often find that they disagree about the quality of the steel.  Generally this problem is exacerbated in times of falling prices — buyers often find that what was acceptable in a rising market is no longer acceptable in a falling one.

When steel can be rejected and why can be both a technical and ethical question. There are times, especially when prices are falling, when company’s attempt to change standards and reject steel that was fine when prices were rising. Our response to buyers is they must defer to the standards that are in place when the steel was purchased. This includes mill terms and conditions as well as ASTM standards and then the standards agreed to in negotiation between the buyer and the supplying mill.