NEW YORK A two-month-old
steel purchasing cooperative for independent reinforcing bar
fabricators is picking up speed, participants told
AMM, with the handful of suppliers already on board
reporting a pick-up in ordering activity from member rebar
fabricators in what is traditionally a slow season for long
"Weve gotten some business
from people we had not done business with (before joining the
co-op)," said Parker Arthur, sales manager at Steel Dynamics
Inc.s Roanoke Bar division, a supplier to the Independent
Steel Alliance (ISA) co-op.
A source at another ISA supplier
who declined to be named said his company has also seen an
uptick in buying activity from member fabricators since joining
the co-op, which was incorporated in May 2012 and officially
launched Jan. 1 (
amm.com, Jan. 23).
"What were seeing now is
the member accounts where wed get one out of four trucks,
now were getting three out of four," he said.
In addition to SDI, the ISA also
lists among its approved steel suppliers Byer Steel Corp.,
Salit Specialty Rebar and BlueLinx Corp., among others who
preferred not to be named, ISA president and founder Chris
Casey told AMM. Casey declined to comment on whether
other steel majors Nucor Corp., Gerdau Long Steel North America
or Commercial Metals Co. had been contacted about joining the
group since its formation at the start of the year.
The co-opthe first of its
kind for rebar in the United States and Canadaworks by
linking up member fabricators, who make an initial equity
investment in order to join, and member rebar
suppliers. Casey projects the co-op
will have 50 members within 24 months, but declined to comment
on the number of members the group currently counts.
Suppliers benefit by getting access to new, independent
customers, the ISA says, while fabricators benefit by receiving
a financial incentive to buy from ISA-preferred suppliers in
the form of a rebate, which is distributed to fabricators after
they buy more than a certain tonnage threshold.
"(Fabricators) have the option
of buying wherever they want, but because of our
preferred-supplier status, which has a rebate attached to it,
(were) more attractive to them," Kevin Cornell, general
manager at Salit Specialty Rebar, an ISA supplier member, told
At least one fabricator member
confirmed its purchasing strategy had shifted as a result of
joining the group.
"We have changed our buying
patterns, we are moving our tonnage to the ISA vendors, and
were just two months into the year," said Burke Byer,
president of Byer Steel, which is both a supplier and a
fabricator of rebar.
But while some members say
theyve seen a shift since joining the fledgling group,
others said the business changes have yet to be dramatic,
particularly as they await an expected pick-up in activity in
the spring when the construction market resumes after a winter
"Were kind of in that gray
area between signing on and the bidding area, and seeing where
this is going to go. Its just a little early to tell,"
said Cornell. "(But) we have great expectations and we think
its going to be good for our business."