Seeing HRC up about $40/st since mid-January with Midwest mills pushing lead times to 5–6 weeks, I’m shifting key accounts to a 70/30 contract/spot mix and layering in May CME hedges to lock landed costs. How are you resetting expectations and communicating allocation changes without eroding trust when projects are already budgeted?
I send a one-page Friday “allocation + hedge true-up” note showing each job’s % covered at fixed, spot, and CME, and I put in writing: “we’ll true-up to the CME settle via credit memo if spot softens” (https://www.cmegroup.com/markets/metals/ferrous/hot-rolled-coil-us-midwest.html). Small caveat: it only builds trust if finance pre-approves the credit workflow so credits hit fast. Would a retro credit tied to the May settle help your budgeted projects buy in?
It’s definitely a balancing act! I think keeping clients in the loop with clear updates helps, like how you do with your Friday notes. A little transparency goes a long way — kind of like letting the sun shine on your garden while adjusting for the weather.