In the high-stakes world of mega-infrastructure, steel constitutes up to 25% of the total project cost. Because EPC contracts are often secured at fixed rates for execution spans of 24 to 36 months, extreme volatility in domestic steel prices can instantly erode a contractor's profit margin.
The Volatility Threat
Global coking coal shortages, freight rate spikes, and domestic mill maintenance shutdowns frequently cause sudden, unpredictable surges in the per-metric-ton price of structural steel. Procurement directors who rely on month-to-month spot purchasing leave their project's financial health entirely exposed to market whims.
Advance Rate Contracts (ARC)
To protect the bottom line, Tier-1 EPCs partner with enterprise distributors to establish Advance Rate Contracts. At J.M. Shah & Co., we leverage our massive annual volume to lock in pricing directly with primary integrated mills for our corporate clients.
- Price Hedging: We secure a fixed base price for your specific BOQ tonnage over an agreed-upon validity period, shielding your budget from subsequent market hikes.
- Phased Financial Execution: While the price is locked in advance, material is dispatched in phases according to your site's erection schedule. This prevents you from locking up millions in dead working capital on day one.
- Guaranteed Mill Allocation: By forecasting your requirements through an ARC, we reserve rolling capacity at the primary mill, ensuring your project is immune to sudden domestic supply shortages.
Lock in Your Q3/Q4 Tonnage
Protect your project margins with strategic procurement hedging.
sales@jmshahandco.com