Steel Buyers Basics: Problems with Long Term Pricing

The following article is a continuation of our Steel Buyers Basics series written by Mario Briccetti.  Mario is Principal of Briccetti & Associates, a Supply Chain consulting firm, and can be reached at Mario@mbriccetti.com

I’ve been getting ready for my presentation in SMU’s May Steel 101 workshop and as part of that presentation updating the current effect of various types of steel pricing deals vs. spot pricing.  At this moment, anyone buying on a long-term fixed price deal or even a lagging CRU index deal is doing poorly against a pure spot buyer of steel and probably will continue to do poorly for some time.