Identifying Supply Risk in Toxic Stainless Supply Chains

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Our earlier piece on radioactive contaminated stainless steel products recently recently found in Germany raises a whole host of issues which we will attempt to cover in the coming days. In particular, this post will attempt to address the question of “does my firm face any risk due to radioactive materials?” Unfortunately, the answer is it all depends. A client of ours mentioned that he was tasked with obtaining written confirmation from stainless suppliers and suppliers who produce products made of stainless that the metals supplied contain no contaminants.

The big question, how do small machine shops or metal fabricators know whether or not the materials they buy contain contaminants, can create a rather lengthy chain of inquiry.  For example, if you are a producer of say stainless steel commercial ovens, you may be doing a lot of fabrication yourself but you may also be purchasing parts, components or assemblies from smaller fab shops who are buying their stainless from local distributors. Since most fabricators are unlikely to own sophisticated radiation detection equipment, they must rely on their suppliers – either distributors who may buy materials from US mills or from importers or from mills directly. The mill direct route would likely provide the best definitive reply since some of America’s biggest producers already have expensive equipment installed at their plants (these producers know that scrap can come from anywhere). But distributors would likely not have such equipment and since they tend to buy from multiple sources, this issue will create a bigger burden on them in terms of confirming materials supplied do not contain any radioactive content, typically cesium-137 or cobalt-60.

Over on Spend Matters,  Jason Busch writes about different technologies available for precisely this kind of situation. And sleuthing for answers has become a whole lot easier. Companies such as Panjiva provide tools which allow companies to identify overseas shippers, products and destinations. And though we may take comfort in the fact that US Customs and Border Control rejected 64 shipments of radioactive goods last year, somehow, we don’t believe that absolutely everything goes through radiation detection. Ironically, though the press suggests that these issues will likely increase over time (and certainly with the crazy metals market of 2008 and earlier) the insatiable demand for metals means people and firms are looking for anything to recycle (even improperly disposed of medical scanners and industrial equipment), the economic slowdown will put a damper on such activities. Hopefully, by the time metal prices start to increase again, the international community will have pressured these governments to adhere to stricter waste disposal rules.

–Lisa Reisman

Comments (3)

  1. Tom Thumb says:

    The former Soviet Union is now in the process of completing a massive ship-breaking of its nuclear fleet, using high-tech wire saws, and the high-grade and highly-radioactive steel is being smelted into stainless. The actual seller and ultimate buyer are unknown, but the contract was floated in 2006, so logical U-SS plate is starting to show in the market. Everything is becoming more adulterated globally.

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