Most ferroalloy disputes are not price disputes. They are specification disputes, delivery-term disputes, or documentation failures. All three are avoidable, and all three are cheaper to prevent at enquiry stage than to resolve at discharge.
Writing a specification that can be quoted
A quotable enquiry answers five questions. A surprising number answer two and then wait for a number that cannot honestly be given.
- Grade and chemistry. The element band you can accept, not the one you would prefer, plus maximums on anything that matters: Al, C, P, S. If a maximum is not stated, assume it is not guaranteed
- Sizing. The range, and the maximum fines percentage. For inoculants this is the specification; for bulk deoxidation it is still the most common source of rejection
- Quantity and cadence. Trial, spot or term, and over what period. A producer prices 50 MT and 5,000 MT differently for reasons that have nothing to do with greed
- Destination. Port or inland, and any local requirements that attach to it
- Packing. Bulk, big bags, drums. This is a cost line and a handling constraint, not a detail
A specification without a sizing range and a fines limit is not a specification. It is a starting point for a disagreement.
Incoterms, in terms of what they actually assign
An Incoterm assigns three separate things: who arranges carriage, who pays, and where risk passes. They do not always pass at the same point, which is where people get caught.
| TERM | SELLER DOES | RISK PASSES | COMMON USE |
|---|---|---|---|
| EXW | Makes goods available at works | At the works | Rarely sensible cross-border; buyer takes export clearance |
| FOB | Delivers on board at the named port | On board at load port | Standard for bulk where buyer controls freight |
| CFR | Pays freight to destination | On board at load port | Seller books freight, buyer still carries sea risk |
| CIF | Pays freight and minimum insurance | On board at load port | The most quoted, and the most misread |
| DAP | Delivers to the named destination | At destination, unloaded not cleared | Buyer handles import clearance and duty |
| DDP | Delivers cleared, duties paid | At destination | Maximum seller obligation, priced accordingly |
The single most common misunderstanding: under CIF, risk passes at the load port, not on arrival. The seller pays the freight and the insurance, but the goods travel at the buyer's risk. Comparing a CIF number against a DAP number as if they are the same product is comparing two different risk positions.
The documents that actually stop cargoes
- Certificate of Analysis. Issued per lot. Confirm whose laboratory, against which standard, and whether it is sampled at load or production
- Certificate of Origin. Determines duty treatment. Errors here are expensive and slow to fix
- Bill of Lading. The title document. Consignee details, notify party and clausing all need to be right before issue, not after
- Packing list and weight certificate. Draft survey or weighbridge, agreed in advance
- Inspection certificate. Where a third party is appointed, agree who appoints, who pays, and whether the result is binding on both parties
- Any destination-specific compliance paperwork, which is the item most often discovered late
Quality, and how to make it enforceable
Agreeing a specification is not the same as agreeing how to prove it was met.
- Sampling point and method. At production, at load, at discharge. These give different answers on a segregating cargo, and the difference is real rather than dishonest
- Umpire analysis. Name the referee laboratory and the tolerance that triggers it before a dispute, not during one
- Rejection and tolerance. What deviation is acceptable, what is priced through a penalty scale, and what entitles rejection
- Retention samples. Who keeps them, for how long
A short checklist
Before releasing an enquiry: grade band, maximums, sizing with fines limit, quantity and cadence, destination, packing, target Incoterm, payment terms, inspection regime.
Before accepting a quote: confirm the Incoterm, confirm what the specification actually guarantees, confirm sizing and fines, confirm lot size, confirm who inspects and where sampling occurs.
None of this is exotic. It is the difference between a cargo that performs and a cargo that becomes a claim.