What do traders do?

What do traders do?

A well known steelmogul  told the audience at the Steel Survival Strategies meetings that traders need to be removed from the supply chain.  He said removing traders would make the supply chain more efficient and sustainable.  Well, I beg to differ.  You actually need us more than you think.

When steel mills are fully booked, as they were last year, where could customers find additional steel ? From traders. This situation could return in 2010 if demand rises before steel mills can return to production.

When mills want or need to move large volumes of steel, traders provide that option, collecting smaller orders and combining them to create efficient production and shipments for the producers, which they get paid for promptly, usually with confirmed letters of credit. How many letters of credit did you collect from your automotive customers?  I doubt you have ever been faced with an invoice to a trading company that was uncollectable.

For customers, traders provide additional supply with additional financing possibilities.  How many banks are offering additional credit these days?

We also provide transportation, insurance and warehousing when necessary to meet on time deliveries.  We can provide technical expertise as required and become partners with both our customers and suppliers if we want to have successful transactions.

Furthermore, traders live their jobs.  They can be reached by their customers and suppliers on their cell phones any time or day of the week.  How many mill sales people can be reached on this basis?

Trading companies  provide marketing, financing, transportation, expertise and everything steel producers provide, except the steelmaking.  In most cases we can provide the non-steelmaking services better than most mills.

The largest steel mills have worldwide networks of employees and can use their own resources to market their steel products.  However small and medium sized steel mills can effectively utilize partnerships with steel trading companies to successfully market their products.

Trading companies did not create the steel shortage of 2007/early 2008 or the surplus of late 2008/2009.

But if there is a shortage again in 2010, call Alliance Steel.  We’ll help you obtain enough steel to meet your  needs when the producing mills put you on allocation.

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