Economy
The Chinese Grinch Who Stole…
Written by John Packard
December 23, 2016
This article should go into one of our Steel Buyers Basics series of articles under the heading “Buyer Beware” or, “If it is too Good to be True….”
The following article is from one of our trading contacts with whom our SMU Publisher had done business during his trading career. The trader is located in the Far East:
Here we go, one of our regular cold rolled coil (CRC) and hot rolled coil (HRC) buyers in SE Asia advised us they wanted to purchase 5000/mts of CRC about 3 weeks ago and they were holding an offer already from a “Trader” and our price would have to be very competitive as that cargo in hand was for prompt shipment. We of course offered direct from the mill vs Trader, and yes we were, as the buyer said, way over the offer he had in hand by USD45-50/mt, and his offer was via CY shipment [Container Yard to Container Yard] instead of Bulk which I thought strange as there are normal bulk shipments from China, but just said to the buyer, by the way which is a quite large buyer, “Hard to contemplate how we are so high from a mill offer vs from a Trader and prompt shipment”. He replied, let’s try on next requirement and a simple OK was our answer.
He sends me email some days later that the LC opened and cargo shipped via containers and all in order… Perfect execution by the Trader, and by the way, one I had never heard of by name. I congratulated him on the purchase of CRC USD45-50/mt and still getting delivery as Chinese norms would be cancel the order or re-neg on the price, but his shipment went unscathed.
Yesterday, he calls me and asked me if I could assist in locating the Trader for that cargo as no one at their offices were answering the phone or replying to emails, and he sent me the info for this company which we could not locate, no other steel partners we know knew of this company etc… I asked the buyer what the problem was and he sent me the 3 photos attached (now you can open the attachments John).
I thought I had seen everything in the steel business but this Takes the Cake John!! The Seller loaded 5000mts of Cement coils in Containers!! Can you imagine the ingenuity to complete such a fraudulent task???
My mouth dropped to say the least and the Moral of “You get what you pay for” came to mind… People should know you don’t buy such large quantities of flats from China via CY shipment and also on a CNF CY basis!! [CNF = Cost and Freight with no insurance. CIF = Cost, Insurance and Freight]
Buyer never saw what was coming as the deal was just too good…
China never ceases to amaze me….
John Packard
Read more from John PackardLatest in Economy
Second steel derivatives S232 inclusion window opens, business community voices concern
The US Department of Commerce announced that its second window for submitting applications for the inclusion of derivative steel and aluminum products in Section 232 tariffs is now open, according to the US Federal Register. September’s Inclusion Window Sept. 15 through Sept. 29, applicants can email requests for inclusions to the Defense Industrial Base Programs. The first […]
Steel Summit: ITR economist urges execs to prepare for growth, not recession
If the steel industry professionals who made it to the very final presentation of this year’s SMU Steel Summit were expecting another round of cautious forecasting, they were in for a surprise. Because what they got was a wake-up call.
ISM: Manufacturing growth remained down in August
US manufacturing activity remained muted in August despite a marginal gain from July's recent low, according to supply executives contributing to the Institute for Supply Management (ISM)’s latest report.
Steel Summit: Dr. Basu blames tariffs for riskier path ahead
Steel executives packed the main conference hall of the 2025 SMU Steel Summit on Tuesday, Aug. 26, to hear economist Dr. Anirban Basu lay out his blunt view of tariffs, inflation, and demand.
Steel Summit: Schneider sees SDI ‘on the edge of a very good run’
Steel Dynamics Inc. (SDI) President and Chief Operating Officer, Barry Schneider, remains bullish about the Fort Wayne, Ind.-based steelmaker’s position in the current market.