What are the differences between Prime & Excess material?
Since its launch, Vanilla Steel's mission has been to facilitate the digital matchmaking between steel professionals, starting with their excess inventory. There are a lot of materials already produced that are not sold to end customers and Vanilla Steel can help extend its life expectancy by finding a new application for the material.
Requalifying already produced metals and preventing scrapping is great for the environment as it avoids further unnecessary CO2 emissions.
As Vanilla Steel has been growing and serving our increasing customer needs, we are now also supplying prime materials, freshly produced and with all the defined qualities.
The purpose of this short article is to help you understand the differences between Prime material and Excess material and why it does matter to define accurately the different qualities of material to better sell it and find a new application.
Definitions of Prime & Excess steel
Prime steel is steel that has been made to order by a producer or purchased from a stockholder’s inventory. The material has passed all manufacturing inspections and for this reason it is offered with full mill certification. It has no defects and customers can make a claim or get a refund if this does not fit exactly the description.
Excess steel is material that is held in inventory but has no internal customer for it. There are many reasons for this situation: orders may have been cancelled or rejected by the original customer, overrollings or surplus material may have been produced in between two orders in the production, or slow movers may have been held in stock too long due to lack of demand.
Material can be therefore in a perfect condition or can have various degrees of defects. It can be fresh from the mills as well as very old. Excess material is also usually sold “as is”, which means no claims nor refunds is possible.
There is in reality a huge variability of excess material and this is why it is important to have a clear classification for it and to provide information as much as possible to facilitate the assessment from the potential buyers.
Classification within Excess steel
Given its variety, a classification within excess steel is needed. The classification can vary among producers and also among geographies. While Germany is using “1A” and “2A” to label material with or without defects, the rest of the market is commonly using a classification under 4 choices:
- 1st choice: material with zero defects
- 2nd choice: material with limited defects (80-98% conform)
- 3rd choice: material with significant defects (50-80% conform)
- 4th choice: material with very significant defects, sold close to scrap prices
How Vanilla Steel helps you buy excess steel
At Vanilla Steel, we facilitate the procurement process of excess material by providing well documented information that helps in making a buying decision:
- Description of the steel category (Prime, 1st, 2nd, 3rd & 4th Choice)
- Picture of the material
- Defect description
- Certificates available
- Grades and other mechanical information
If a seller wants to maximise the price of its material, they need to provide as much information as possible as every detail counts. We have built a digital tool that allows the ecosystem to efficiently sell these materials and reduce the risk of surprises for the buyer.
If one of the market participants regularly publishes incorrect information, they will then be excluded from the platform. In this way, we successfully act as a trusted third party ensuring that buyers & sellers have a great customer experience.