How to Control Steel Quality During Purchasing

If you are responsible for buying steel, it is important to know how to control its quality. This is even more important if you are both selling and sourcing materials yourself.

1. Direct Supply from Steel Mills

Getting steel directly from mills is the most reliable way.

• If your company has this access, it is a huge advantage.

• Steel from mills usually follows agreed standards.

Key Factors to Check:

• Use of Scrap Materials
  Scrap often contains impurities. If not handled well, the steel may have radioactivity or poor quality. The steel mill’s smelting process must be strong enough to handle this.

• Element Standards
  Steel is cheap, but adding quality elements during smelting adds cost. Some mills may reduce the use of expensive elements, especially in special steel.
  Example: Nickel (Ni) content in stainless steel. Large mills like Baosteel control it better than smaller local mills.

✅ Tip: When sourcing directly from mills, their entire production process must be reviewed. This takes time but ensures quality.

2. Trader-Based Procurement

This is the most common model in the market today.

• Many steel mills work through traders or agents.

• Traders often maintain close relationships with mills for better prices and delivery.

Types of Purchases from Traders:

• Spot Purchasing
  You buy from the trader’s existing stock.

• Futures Purchasing
  You place orders in advance. (Not discussed in detail here.)

Spot Purchase Tips:

Check the following:

1. Steel Mill Origin
   Different mills offer different quality. For carbon steel, the difference is small. But for special steel, quality varies a lot.

2. Production Standards
   Many use enterprise standards (e.g., QB or BQ). You should compare these to GB, DIN, or ASTM standards.

3. Warranty Terms
   Most traders do not offer warranty upfront. If they do, check clearly what is covered. Many materials come with “no mechanical property guarantee“.

4. Production Date and Material Condition
   Traders may offer old stock. Always check the production time and condition of the material.

3. Quotation and Pricing System

In most cases, prices are controlled by steel mills or the market.

However, prices can fluctuate a lot, and trader entry is easy. So, building your own pricing system is better.

How to Build a Price System:

• Use public steel price platforms.

• Add your own service or agency fee on top.

• Use daily price updates + a booking fee model.

✅ Benefit: This helps lower your management costs and gives you more control.