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I just had a European steel mill refuse to quote me their product (long)

Posted on 7/2/18 at 9:10 am
Posted by OBReb6
Memphissippi
Member since Jul 2010
37779 posts
Posted on 7/2/18 at 9:10 am
I am managing a project sold to a US refinery that requires a specialty grade of carbon steel which is very difficult to produce. In fact there is only one US based steel mill, ArcelorMittal, that we were aware of that we thought would be able to produce this product. Well we go to ArcelorMittal and they review the RFQ and inform us that they must regret the quote as they cannot produce material to meet the specified mechanical properties at this thickness. (ETA ArcelorMittal quoted this plate for us in the bid phase, but is now saying they can’t. This is a whole other discussion).

Ok, well we’re in a bit of a pickle and we realize we’re gonna have to go to Europe and just eat the 25% tariff and hopefully our customer will help us out a bit. There is only one mill in Europe we are aware of that produces this grade of steel that will meet specifications, Dillinger Hütte in Germany. Well we call our Dillinger sales rep and briefly describe the details of our needs, he interrupts in his heavy German accent and asks if this is to be shipped to the US and we say yes, so he cuts us off and says they are not selling any steel which is to be shipped to the US, period.

So we are in a bind. Having to eat the tariff cost would have been a killer for us anyway, and the department of commerce has exemption forms (which we would likely be granted since the product we need is not produced in the US), although the waiting period for the exemption forms could take as long as 90 days. But here we are, with the only mill we know of refusing to sell to us. I mean they could jack the price up and make a pretty profit, and there would be little we could do about it, but they are flat out refusing, in what I assume is simply spite and anger.

We will search for other mills that could possibly help us, but this is an area we are very knowledgeable in and we think this grade of steel simply isn’t available outside of the two mills I mentioned (other than likely some Chinese and Indian mills which would be low quality and are also prohibited for this project). It certainly isn’t available in the United States.

I am a loyal Trump supporter, but wanted to share this with the board as I think it is very relevant and a topic that should be discussed. Please share your thoughts, and I apologize in advance as I am busy at work and might not be available to answer a lot of questions.
This post was edited on 7/2/18 at 11:49 am
Posted by The Maj
Member since Sep 2016
27132 posts
Posted on 7/2/18 at 9:12 am to
quote:

so he cuts us off and says they are not selling any steel which is to be shipped to the US, period.



I am calling bullshite right here...
Posted by idlewatcher
County Jail
Member since Jan 2012
79120 posts
Posted on 7/2/18 at 9:12 am to
What's the material exactly? I may be able to help via Italy.
Posted by Haplochrom
Member since Aug 2006
4013 posts
Posted on 7/2/18 at 9:12 am to
(no message)
This post was edited on 8/18/18 at 5:22 am
Posted by wickowick
Head of Island
Member since Dec 2006
45806 posts
Posted on 7/2/18 at 9:13 am to
So only 2 mills produce this type of steel in the world and only one of them in the size that you need?
Posted by OBReb6
Memphissippi
Member since Jul 2010
37779 posts
Posted on 7/2/18 at 9:14 am to
SA-516-70N HIC
10% max CLR

Several other chemical restrictions
Posted by idlewatcher
County Jail
Member since Jan 2012
79120 posts
Posted on 7/2/18 at 9:14 am to
Give me your email and I'll introduce you to someone you wish you would've known in another lifetime :)
Posted by OBReb6
Memphissippi
Member since Jul 2010
37779 posts
Posted on 7/2/18 at 9:15 am to
Lots of mills produce the grade of steel, but only these 2 mills can produce it in the thickness and mechanical/chemical restrictions that we are asking for.
Posted by 90proofprofessional
Member since Mar 2004
24445 posts
Posted on 7/2/18 at 9:15 am to
rest easy; i have been assured that "they" need us more than we need them
Posted by narddogg81
Vancouver
Member since Jan 2012
19700 posts
Posted on 7/2/18 at 9:15 am to
None of this happened
Posted by JuiceTerry
Roond the Scheme
Member since Apr 2013
40868 posts
Posted on 7/2/18 at 9:16 am to
We all have to make sacrifices in The Great War
Posted by LSURussian
Member since Feb 2005
126962 posts
Posted on 7/2/18 at 9:16 am to
quote:

Lots of mills produce the grade of steel, but only these 2 mills can produce it in the thickness and mechanical/chemical restrictions that we are asking for.
Did your company know this before you submitted your bid?
Posted by idlewatcher
County Jail
Member since Jan 2012
79120 posts
Posted on 7/2/18 at 9:17 am to
quote:

SA-516-70N


We've used that material for isotanks for AHF 99%. Is the application for reactor?
Posted by OBReb6
Memphissippi
Member since Jul 2010
37779 posts
Posted on 7/2/18 at 9:17 am to

This post was edited on 7/2/18 at 9:19 am
Posted by TexasTiger1984
Houston
Member since Sep 2009
1375 posts
Posted on 7/2/18 at 9:17 am to
I work for a large pipeline company. Our new projects costs are going up A LOT due to the uncertainty with the tariffs. There have been tens of thousands of exemption applications, but none have been approved or denied at this time. A lot of people are pulling their hair out.

All that being said, I'm ok with it. While it will make our projects more costly and probably end up costing the end consumer a little more, I understand that this is likely temporary and is necessary for the long term betterment of the good ole U-S-of-A

We actually just announced a 48in pipeline project. There is only one mill in the US that might be able to produce the pipe at the wall thickness and yield we require. If they can't do it, we'll have to go overseas. But we factored that cost into the project estimate.
This post was edited on 7/2/18 at 9:20 am
Posted by idlewatcher
County Jail
Member since Jan 2012
79120 posts
Posted on 7/2/18 at 9:17 am to
ok delete it now
Posted by 90proofprofessional
Member since Mar 2004
24445 posts
Posted on 7/2/18 at 9:18 am to
can't make an omelette without breaking a few eggs
Posted by keks tadpole
Yellow Leaf Creek
Member since Feb 2017
7579 posts
Posted on 7/2/18 at 9:18 am to
If your upper management signed a contract without taking steel tariffs into consideration or rather not knowing for fact the alloy could actually be produced domestically, then yes, you are in a pickle created by your upper management, and no one else.
Posted by RogerTheShrubber
Juneau, AK
Member since Jan 2009
260546 posts
Posted on 7/2/18 at 9:18 am to
This tariff bullshite has the potential to disrupt the momentum he has going with the economy.

I don't get it. Maybe he has some end game that I can't see but this is just really crappy economics.
Posted by auggie
Opelika, Alabama
Member since Aug 2013
27956 posts
Posted on 7/2/18 at 9:18 am to
This is why diminishing the U.S. manufacturing capabilities over the years is a disaster.

It's got to be fixed, and it's probably going to be painful for some.
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