Steel Buyers Basics: Specialty Grade Steel

I once asked a friend, who works for a large steel mill, how many different grades of steel they produced – he estimated the number at 1,000!  On top of that, each grade can come in any gauge, any width and many may be coated.  Mills make an almost unlimited number of different individual types of steel.  Buyers can, therefore, order almost any type and size of steel they want.  However this flexibility comes at a cost.

Steel is refined in a large furnace vessel one batch at a time (typically known in the industry as a “heat”).  Depending on the Mill, the batch size could be 90 to 300 tons in size.  Mills therefore must make at least this amount of a particular grade.  Some grades are commonly used by customers and Mills are making them all the time.  However many grades are not commonly used.  For these grades Mills will either wait for enough orders to justify making a full heat or demand that any order is for at least one full heat.