After a hard one month of effort with fun and laughter picked up along the way, we are delighted to introduce you to our Oakley Steel Blog.

The Oakley Steel Blog is a public communication portal where we are able to discuss about topics to do with the steel industry in general, buying experience from Oakley steel, your thoughts on how we are and how we can do better, so do read our interesting pages and please participate with your comments, compliments and feedback!

What can we expect to read on Oakley Steel Blog? Here is a summary to get you going:

• News about Oakley Steel and current events the company is taking part in.
• News and updates about our products, services, promotions.
• Monthly newsletter update – do you want to get a copy? Please email senayo@oakleysteel.co.uk if you want to be included in the distribution list.
• Special events, important campaigns involving both clients and partners of Oakley Steel.
• General outlook to the steel industry from Oakley Steel perspective.

We are open to any discussion or subject related to Oakley Steel’ and to the steel industry. We appreciate the genuine members and users for giving their real identity and for bringing solid and verifiable arguments in the discussions that we are hosting.

What not to expect on this blog are equally important as what to expect on this blog, here is a few OBVIOUS to many reminders: Uncivilized language, discussions without any basis, discussions about product prices or any prices, discussions about other services, products or prices of other companies which are in conflict of interest with Oakley Steel Limited to name a few.

Thank you very much for your visit. We look forward to welcoming you here again soon !

In MEPS latest steel news update we can see that there is a slight divergence in steel demand between Europe and Asia. In Europe Steel consumption is being held back by the poor economic conditions – and the threat of worse to come has reduced credit and stocks across the industry. Traditional heavy users such as autos and construction are unlikley to improve in the near term and this has put pressure on European mills export departments – despite them having reduced stock levels to play with.

In Asia demand is still strong with areas of local strong demand – despite China’s slowing growth – but in the rest of the world demand is falling in line with economic output.  With no obvious engines for growth available in 2012 – but with market pessimism already priced in we expect a slow decline in steel prices across the board. However for specialist steels we also expect a faitr amount of variability as less rolling by mills means reduced stocks – paerticularly in the thicker plates – allowing stockists to set their prices for their thickest pieces.

The MEPS Nordic Average Strip Mill Price increased in January – the first gain for ten months. There has been little indication of a pickup in real demand. However, restocking and the anticipation of increasing prices have encouraged buyers to place orders.

We now detect shortages in some sizes of hot rolled coil, after purchase volumes increased in January. Although delivery lead times for cold rolled coil remain short, prices have risen slightly in most countries, this month, and further hikes are expected. There are few competitive offers from India or the Far East. Consumption by German and Swedish auto makers, which has sustained demand for coated sheet and coil, has slowed, somewhat. Basis figures for hot dipped galvanised and electro-zinc coated products are converging with those for cold rolled coil.

Applications using high specification qualities of hot rolled plate continue to thrive but weakening demand from consumers of commodity grade plate has put negative pressure on values recently. Market participants believe the cycle has bottomed out and higher prices are anticipated in the coming months.

The MEPS Nordic Average Price for long products increased in January. Construction activity has held up reasonably well recently, aided by the prolonged absence of severe wintry weather, in most of northern Europe. This has helped to sustain the demand for long products. Furthermore, scrap prices climbed steadily between early December and mid-January. Consequently, basis value increases were accepted without much resistance from buyers.

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The MEPS BRIC Countries’ average transaction prices decreased in January for all eight carbon steel product forms researched. The downward movement varied between 1.4 percent for medium sections and 3.8 percent for hot rolled coil.

Brazilian steelmakers are finding it difficult to fill order books. Underlying consumption has fallen short of industry projections. This has fuelled expectations of price stability in the January/March period. Market sentiment in Mexico has been undermined by price volatility and economic uncertainty. Distributors have found the latest transaction values unattractive.

Purchasing activity has stagnated in the Russian Federation. Domestic steelmakers downgraded selling figures for several steel products. Ukrainian steel consumption has been deflated by the country’s strict credit conditions. Traders plan to postpone purchases until the domestic pricing scenario is more transparent.

Indian distributors contend that the latest domestic price levels are not supported by market and economic fundamentals. Steelmakers without captive iron ore mining assets have welcomed the government’s decision to impose 30 percent duty on exports. The foreign trade has been blamed for stifling domestic competition and lifting production costs.

Difficult trading conditions persist in Turkey. Market sentiment has been eroded by the EU sovereign debt crisis and unfavourable weather conditions. Construction activity is not expected to improve until weeks 8 and 9. End-users intend to steer clear of large flat product purchases in the interim. Price competition has intensified amongst steelmakers and distributors.

The outlook for the United Arab Emirates’ steel market is unchanged. Stockists intend to persevere with conservative inventory levels, following low import quotations and an uncertain global economic climate. Shipments to the construction and infrastructure projects remain scarce.

Sources MEPS Steel News

Hydrogen Induced Cracking

We sell a lot of plate resistant to Hydrogen Induced Cracking (HIC) to the Oil and Gas Industry and so I thought it would be worthwhile explaining what HIC and why it is an issue in sour gas environments.

In the oil and gas industry a sour gas environment is one where there is a high concentration of Hydrogen Sulphide (H2S). Occasionally due to corrosive reactions hydrogen atoms will be freed and then diffuse through the surface of the steel pressure vessel plate and come to rest in  tiny cavities where they may bond with other hydrogen atoms to form hydrogen molecules.

The hydrogen molecules cause a buildup of pressure inside the structure of the steel – in a similar way to ice expanding cracks in rock – and this reduces its ductility and tensile strength – a problem in pressure vessels!

An example of cracking caused by Hydrogen Embrittlement

HIC is very difficult to detect as it occurs on the inside of vessels and can result in catastrophic failure. One response has been to develop steel plates which are resistant to HIC and you can find out more of them on the Oakley Steel Website

ASTM A 516 or ASME SA 516 grade is a great steel for pressure vessels. It is primarily intended for use in welded pressure vessels where notch toughness is important and comes in four grades 55, 60, 65 & 70.

Between them these grades cover a range of tensile strengths from 55 – 90 MPa.

Plates thinner than 40mm are normally supplied as rolled by can be normalised or stress relieved orboth.

Above 40mm plates are normalised.

For A 516 Gr 70, which is one of our most popular steels, the ASME standard composition is as follows (dependent on grade):

• Carbon 0.27 – 0.31%
• Manganese 0.79 – 1.3%
• Phosphorous 0.035% max
• Sulphur 0.035% max
• Silicon 0.13 – 0.45%

We can supply a wide range of sizes and thicknesses according to your needs.Our steel is excellent quality and comes from some of the best mills in the world. It is used indemanding engineering applications where safety and performance cannot be compromised

For more information on A516 plates including detailed physical and chemical properties.

When buying steel you have to think ahead. Most steel distributors only hold limited amounts of steel in stock. They will rarely sell all their stock to one customer because they will then be disappointing a number of other regular customers. The stock that distributors carry in a particular grade will be subdivided by thickness and size. This means that a distributor with a stock of 100,000 tonnes may only have 50 to 100 tonnes of your precise requirements. In many cases this is why you will be offered alternative thicknesses or sizes so that delivery can be arranged immediately. Another reason is that distributors won’t carry all possible thicknesses in stock.

If you need more steel than this it will come from the mill directly. A typical steel mill costs $300 million dollars. A new state of the art mill costs many times that. The running costs are high and so the mills engage in a great deal of capacity planning to make sure that they maximise their output. This means that output for the next 3 to 4 months is sold in advance to stockholders and distributors.

If you need 1000 tonnes of ASTM 516 70 in a hurry you have a difficult choice. Do you wait for 4 months for the mill to produce the steel, or do you talk to 15 distributors – buying 60 tonnes from each, with all the cost in time and resources that involves.

If you need steel quickly it will be expensive. At Oakley Steel we help a lot of companies who need steel urgently. Sometimes better forecasting would have helped these customers – but often that is not possible given the nature of the steel business.

Ordering further in advance has a number of advantages; prices are usually better and you get more certainty about the final costs and delivery dates. You also build your relationship with your preferred supplier which helps you when a rush job comes through. At the same time if you’ve already bought your steel in advance and the project is delayed or cancelled – that hurts your cashflow

For small businesses we often recommend that you let your steel supplier know as much about your forward order book as possible (taking account of commercial sensitivity). A good supplier, when you ask him to quote, will then often be in a position to supply you far faster than otherwise.

Larger businesses have more options. For manufacturers who can forecast with some accuracy it can often be worth establishing long term relationships with a small number of suppliers that you trust. This keeps prices competitive but can often reduce your procurement costs by having one annual order with phased delivery and payments.

Welcome to the December issue of Oakley Steel newsletter

Firstly we would like to wish all our customers, friends, colleague’s & families who celebrate Christmas a very Merry Christmas and hope for a wonderful New Year 2012. Thank you for your business in 2011. It has been a pleasure working with you and for you. We are grateful for good customers, colleagues and friends like you, who make our work satisfying and enjoyable. We look forward to working with you in 2012 and we wish you a prosperous and happy new year! May the dawn of New Year leads you to the path of beautiful tomorrows and brings abounding joys, filling your heart with love and home with happiness.

See below Steel information, stock information and other grades you can now find with Oakley Steel Limited.

1. GLOBAL FLAT PRODUCTS STEEL PRICE DROPPED 2.5 PERCENT IN NOVEMBER

As US strip mill product prices continued to fall rapidly in late October/early November, a number of mills began to announce increases ranging from $US30 to $US50 per ton, which were to be effective immediately. Certainly, the proposals have stemmed the previous negative movements. However, customers have questioned how much of the rise will stick, since underlying demand remains muted. Indeed, service centres are complaining of lower margins and fewer sales as the year-end approaches. Moreover, mill utilisation rates and input costs are increasing. Buyers are still cautious regarding their forward purchasing levels.

Canadian transaction numbers have weakened again over the last four weeks. Producers have now announced an increase of $C30/40 per ton, effective with all new orders, claiming that today’s values are unsustainable relative to their costs of production. Demand is mediocre and the distribution sector is carrying excess inventory. Steelmakers hope that the prospect of prices bottoming out will encourage buyers to place much needed orders.

Chinese steel output has started to contract in a climate of slowing demand at home and abroad, together with falling prices. Market conditions are unlikely to improve next month. Baosteel, along with other local mills, has elected to cut its official ex-works figures for December bookings in line with market expectations.

In Japan, a small upturn in domestic demand is compensating for a fall in export business. However, imports continue to rise due to the strong yen. Market prices are still edging downwards, reflecting lower raw material costs and poor market sentiment.

Overall steel demand is soft in South Korea. The major consuming sectors of auto, domestic appliances and ship building are expected to contract during the remainder of this year. Inventory adjustment is slow. Stocks of flat products reached record highs at the end of September.

In Taiwan, CSC has left its domestic prices unchanged for the October/November period. The company stated that the typical peak season demand usually experienced in the final quarter has failed to materialise, partly due to the poor global economic outlook.

Global economic uncertainty has caused steel consumption to slow in Western Europe. Moreover, buyers are reluctant to place forward orders on the mills. Market players feel that worldwide production cuts will hold the key to price stabilisation. Although the steelmakers are curbing capacity, the results are unlikely to be felt until the start of 2012 at the earliest.

Oakley Steel says:

There is a lot more uncertainty and steel stocks have not increased back to the levels that they were in 2007. We expect availability of plates to reduce over the coming months and the availability to be the key to pricing for small orders. For larger orders prices will move generally in line with flat products – but lagging slightly.

©Source: MEPS

2. EX-STOCK AVAILABLE FOR IMMEDIATE SHIPMENT ON SPECIAL RATES!

3. OAKLEY STEEL GRADE UPDATE:

You can now send us your enquiries for the Offshore grades in S355 G10+M / S355 G8+M / API2W50, Construction grades in S355 ML within the thickness range of 10-100mm

Keep your enquiries coming through to either me (senayo@oakleysteel.co.uk) or toSales@oakleysteel.co.uk

Thank you for reading our December Newsletter and hope to hear from you all in year 2012

GLOBAL FLAT PRODUCTS STEEL PRICE DROPPED 2.5 PERCENT IN NOVEMBER

As US strip mill product prices continued to fall rapidly in late October/early November, a number of mills began to announce increases ranging from $US30 to $US50 per ton, which were to be effective immediately. Certainly, the proposals have stemmed the previous negative movements. However, customers have questioned how much of the rise will stick, since underlying demand remains muted. Indeed, service centres are complaining of lower margins and fewer sales as the year-end approaches. Moreover, mill utilisation rates and input costs are increasing. Buyers are still cautious regarding their forward purchasing levels.

Canadian transaction numbers have weakened again over the last four weeks. Producers have now announced an increase of $C30/40 per ton, effective with all new orders, claiming that today’s values are unsustainable relative to their costs of production. Demand is mediocre and the distribution sector is carrying excess inventory. Steelmakers hope that the prospect of prices bottoming out will encourage buyers to place much needed orders.

Chinese steel output has started to contract in a climate of slowing demand at home and abroad, together with falling prices. Market conditions are unlikely to improve next month. Baosteel, along with other local mills, has elected to cut its official ex-works figures for December bookings in line with market expectations.

In Japan, a small upturn in domestic demand is compensating for a fall in export business. However, imports continue to rise due to the strong yen. Market prices are still edging downwards, reflecting lower raw material costs and poor market sentiment.

Overall steel demand is soft in South Korea. The major consuming sectors of auto, domestic appliances and ship building are expected to contract during the remainder of this year. Inventory adjustment is slow. Stocks of flat products reached record highs at the end of September.

In Taiwan, CSC has left its domestic prices unchanged for the October/November period. The company stated that the typical peak season demand usually experienced in the final quarter has failed to materialise, partly due to the poor global economic outlook.

Global economic uncertainty has caused steel consumption to slow in Western Europe. Moreover, buyers are reluctant to place forward orders on the mills. Market players feel that worldwide production cuts will hold the key to price stabilisation. Although the steelmakers are curbing capacity, the results are unlikely to be felt until the start of 2012 at the earliest.

Oakley Steel says:

There is a lot more uncertainty and steel stocks have not increased back to the levels that they were in 2007. We expect availability of plates to reduce over the coming months and the availability to be the key to pricing for small orders. For larger orders prices will move generally in line with flat products - but lagging slightly.

This article was bought to you courtesy of MEPS

The international steel market is full of middlemen helping product manufacturers purchase steel. For the small and medium sized enterprise that needs high quality steel this can lead to increased costs and low satisfaction with the process.

From our experience over the years we’ve seen that a large percentage of middlemen, and agents, are not providing a high quality steel sourcing service to their clients.

1. Lack of product knowledge – many agents have little experience in purchasing steel, or specifically pressure vessel steel, and are unable to advise a client effectively on which is the best quote – they can say which is the cheapest, but your accounts department can do that as well. Tip – If the agent deals with anything other than steel consider finding a more specialist agent to assist you.
2. Cost – An agent adds 5 – 10% to the cost of the purchase order. For this to be worthwhile they have to substantially reduce the time and effort involved for you to source the steel. For an order of 10,000 Euros a commission may be 1,000 euros – that is the same as employing a senior executive in Malaysia for a month. If you buy regularly this may not be cost effective.
3. Google – 15 years ago it was hard to find suppliers because you didn’t find many European telephone directories in the SE Asia. Now you can type the steel grade you require into Google and find suppliers easily. “A516 Steel” gives you an immediate link to Oakley Steel. Do you need an agent to type that for you?
4. Relationships matter. An agent who just sends an enquiry to the top 5 steel stockists on Google will be lucky to get a response. Why? Going back to the previous example of the 5 steel stock holders on the first page of the results, four are based in America and focus exclusively on their domestic markets. For a steel stockholder shipping internationally is difficult, time consuming and potentially expensive. With plenty of domestic orders they won’t bother with an international one from an unknown company.
5. Shipping skills – It’s important that an agent has experience in shipping steel internationally. Lots of little things can rapidly increase the shipping costs. In experience can increase the paperwork, delays and the dreaded demurrage charges – when your steel is on the dock but yu can’t collect it because you don’t have the right paperwork.
6. Putting things right – Once an agent is paid who is going to help you if there is a problem with a boiler plate. It does happen, and in the past we’ve helped customers who’ve found manufacturing defects in plate and needed to get a replacement plate PDQ.
7. Speed – an agent should bring knowledge into the procurement process – but often he is unable to answer questions directly and stockholder, agent and customer play email bounce as they try and resolve simple questions. “We don’t have a particular size available, but will this one do?” is a common response from a stockholder. It’s often a simple response from a design engineer – but for an agent it’s often a deal breaker as he doesn’t understand the implications, confuses everyone, or passes on messages too slowly.

There are some great agents available – but before you choose one to help you buy steel for shipping to South East Asia think on the above points and choose wisely.

Everyone knows that steel is a commodity. We’ve been making it for thousands of year, it’s been an industrialised process for hundreds of year and with concrete and possibly tarmac it forms the very structure of modern civilisation.

Not all steels are the same. Even for specialist applications such as boiler and pressure vessel manufacture there are a wide range of steel specifications available to be used, and a large number of suppliers.

Even though pressure vessel steel is not a commodity it’s price is linked to the underlying steel price – though at multiples of 2 or 3 times that of low grade construction steel. The price difference is based on the addition of more expensive alloys, the increased requirements of the manufacturing process and the implications of it’s use.

You can always find cheaper steel. The question’s you  need to ask are : Why is it cheap and what implications does that cheapness have for my project? Here are some thoughts:

• New manufacturers of a grade often have to reduce their prices because of lower steel quality. They may not have got the mix right or the rolling process may have led to more sub surface imperfections than another manufacturer.
• Alloying components are often at higher cost and by reducing these to the minimum requirements (or below) the physical and chemical properties of the steel will be effected (for some purposes it may be acceptable to purchase secondary boiler plate that doesn’t quite meet ASME/ASTM specifications)
• Risk: By saving 50 Euros a tonne buying lower quality steel refineries and production facilities costing hundreds of millions of dollars can be put at risk. During 2009 a number of our clients sought to reduce costs in this manner and had very expensive rework requirements incurred as the pressure vessels failed to perform adequately in service
• RAMS – Reliability, Availability, Maintainability and Safety. A boiler is only as good as the plates and the welds that deliver the design. A defective plate – and all manufacturers have defective plates – will mean that a boiler has to be taken out of service, decommissioned or never commissioned to start with. This happens more frequently with lower quality plates – increasing the lifetime operating costs for then plant owner.
• Customers will blame the supplier when plant fails, even if they are responsible for the low quality of the steel. In contrast suppliers who focus on providing a superb product, think of German engineering, continue to flourish even in harsh economic climates.

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