World Steel Dynamics regularly performs customized in-depth engagements providing investment and strategic decision support covering technology developments, cost drivers, competitive conditions and market outlook. Past consulting assignments have ranged from competitive market assessments to detailed company evaluations and product-specific market studies. Clients have included U.S. and international steel producers, steel users, raw material suppliers, private equity groups, institutional investors, global banks/lenders and government organizations, among others.

Our Innovative Approach

WSD seeks to be innovative in our customized client engagements. This is a function of effort, method and extensive knowledge of the global market. Regarding method, we take both a bottom-up and top-down approach to answering questions. We also try to apply time-tested “industrial structure” economic principles to better understand what has happened and what will happen. Regarding knowledge, WSD principal partners and staff have more than 100 years of combined experience in analyzing the steel industry. A major aid is World Steel Dynamics’ vast database on international steel prices, costs, capacity, demand and finances, which permits the detailed analysis of historic relationships in an industry perspective. We frequently work with an array of outside industry experts specialized in various steel industry disciplines.

In performing these studies, detailed marketplace and product pricing crosschecks are a frequent requirement. These are facilitated by our extensive network of contacts the world over. We also place great emphasis on the relative cost position of the firm. The purpose is to better understand what conditions are necessary for the steel firm in question to have the “pricing power” to pass on its costs.

Consulting assignments have covered a broad range of subjects in the past. A few of the examples include:

  • Assessments of market and competitive opportunities in a range of commodity and specialty steel products, such as steel scrap, slabs, plate, flat-rolled sheet, rebar, and iron ore. These typically include long-term demand forecasts, supply assessments, production cost analyses of the leading players, names and requirements of specific buyers and sellers, trade balances and historic and forecasted pricing trends.
  • In-depth competitive evaluations and long-term viability analyses of individual plant sites in a specific region. These evaluations often include forecasting regional/global market demand, assessing the strategic strengths and weaknesses of competitors, process-by-process cost benchmarking, and developing a hierarchy of the mills as to the probability of an extended idling or closure.
  • Due diligence reports including assessments of steelmakers’ competitiveness in a global context, evaluations of the relative equality of the product mix and product facilities and forecasts of domestic and global market and competitive developments to identify risks to the operations.
  • WSD has supported numerous Initial Public Offerings (IPOs), private equity transactions and other financial sector requirements by providing data and other tailored information services related to the steel industry.
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Steel Pricing Stratagems

WSD offers advisory and consulting services at the steel buyer/seller interface. On a confidential and “hands-on” basis, WSD advises clients on the approaches that may prove useful to improving their steel buying and selling performance, while at the same time managing future price risk.

  1. Client’s buying performance benchmarking. Compare Client’s historical price performance versus general market prices and OEM best practice price benchmarks (e.g. automotive). 
  2. Benchmark steel buying strategies.  Review buying strategies in use today by Client.   Provide strategy benchmarking versus best-in-class strategies that are appropriate for meeting Client’s business objectives. 
  3. Alternative procurement strategies.  Recommend where appropriate alternative contracting methodologies, additional performance metrics, and ways to improve the Client’s buy/sell price alignment/management of steel cost changes.
  4. Steel price hedging support.  Provide periodic updates on steel futures developments, financial swap pricing and financial price hedging strategies to meet Client’s needs.
  5. Identifying supplier selection alternatives.   Review Client’s current supplier alignment and performance.  Make recommendations where appropriate for alternate supplier choices (inclusive of international sourcing opportunities).
  6. Scrap management and scrap sales optimization.  Benchmark Client’s scrap sales performance and provide recommendations on best-selling practices.
  7. Monthly steel price forecasting.   Provide price forecast for relevant steel products to Client (currently providing, on a monthly update basis, a 12-month price forecast for shredded scrap, cold roll, and hot-rolled band)

Schedule a call with one of our analysts to determine how WSD can assist in improving your performance.

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