[Ferro-Alloys.com] There was a major change in the US manganese alloy market last week, with Nucor apparently moving to centralized buying. However, there are more questions than answers about the new policy.

 

The largest US manganese alloy buyer tendered for its 2013 requirements- 26,580 net tons of high-carbon ferromanganese, 14,067 net tons of medium-carbon ferromanganese, and 9,676 net tons of low-carbon ferromanganese. The quantity is for 70% of the 12 mills expected requirements for next year; the remaining 30% is covered under long-term agreements. Silicomanganese was not covered in the tender.

 

The RFQ is a requirements contract and Nucor will not guarantee tonnages. In addition, Nucor wants a 2% net 10 days discount, up from 1%. The mill will consider all pricing options, though everyone is expected to tender on a formula basis.

 

The centralized buying is a standard feature with other US steel producers with multiple locations since management feels a single buyer can get the lowest prices.

 

However, until now, Nucor kept with each mill buying its own requirements, due in large part to each mill being its own profit center. Also, some of the mills in easy access locations felt they could get the best deal if they weren’t saddled with the plants with high transportation costs.

 

“Change is never popular," a competitor said. "The first tender is always the hardest and the individual buyers and suppliers will have to work out their difficulties."