Nucor just put out its high-carbon ferromanganese tender for next year, and the implications of the RFQ are giving me a headache. It’s not that the company is looking for slightly more than 34,000 tons for 13 locations but who is going to bid on it and under what circumstances.
It’s a pretty standard Nucor tender. The tonnage is based on requirements to the there is no fixed amount per mill. The pricing method would be determined by the supplier but it must be uniform for all divisions. The quotes should be f.o.b. warehouse with location provided. Finally, the bidder would have to increase freight costs from the warehouse to the participating divisions’ locations separately.
DJJ was not mentioned in the tender—previous RFQs had a line item that allowed the supplier to bid on supplying DJJ with material for resale. That line item is now missing. And, in the past, most suppliers ignored that line.
It is expected that DJJ will bid on the Nucor business using South 32 material. Other suppliers are wondering if the tender has already been awarded, not officially but unofficially, to DJJ and it’s just a way to fish for market information.
Also, Nucor generally likes to have more than one supplier, but will DJJ get all the business? This is complicated since some suppliers are refusing to bid on the Nucor tender, saying it is a conflict of interest since DJJ is owned by Nucor.
Right now, suppliers are telling me that you can’t get ANY high-carbon ferromanganese in the US for less than $1,150 per lt.
Quotes are due by Nov. 28.