MOQ Is Not One Number. It Is Four.
Every buyer has asked for the MOQ and every seller has given one number, and both walked away with the wrong idea. In steel there are four different minimums, and which one applies depends on what you are buying and how it is shipped.
- Mill MOQ per size. The tonnage a mill will roll for one section, grade and size in a single run. Often 25 tons per size for long products and coil.
- Container MOQ. The tonnage that fills a container economically, about 25 tons for a 20GP of steel. Below this you pay for the container, not for the steel.
- Mixed size MOQ. The minimum when you blend several sizes into one order, often 20-25 tons total.
- Trial order MOQ. The reduced minimum a supplier may accept for a first order to test quality, sometimes one container or a partial container.
When a supplier quotes an MOQ, ask which of the four it is. A 25 ton MOQ that is a container MOQ can often be reduced to a mixed size order; a 25 ton mill MOQ per size usually cannot.
How to Read an MOQ Quote
| Situation | Likely minimum | What to negotiate |
|---|---|---|
| Single size, large tonnage | Mill MOQ, per size | Price break at higher tonnage |
| Several sizes, moderate tonnage | Mixed size MOQ | Combine sizes in one container |
| First order, testing quality | Trial MOQ | Third party inspection |
| Urgent small order | Stock MOQ | Accept a higher unit price |
If your annual volume is below the mill MOQ for a size, buying from a stockist or combining sizes is the practical route, and the small price premium is often cheaper than the storage cost of over-buying.
Lead Time, Broken Into Weeks
Buyers treat lead time as one number, then are surprised when the goods are late. Break it into stages and manage each one.
| Stage | Typical duration | Notes |
|---|---|---|
| Quotation and spec confirmation | 2-3 days | Exchange drawings and grade |
| Proforma invoice and payment or L/C | 3-7 days | L/C opening is the slowest part |
| Production | 20-30 days | Longer for non standard sizes |
| Booking and inland to port | 7-14 days | Depends on port congestion |
| Ocean transit | 15-45 days | Depends on route |
| Documents and release | 3-7 days | B/L, certificate, packing list |
The production window, not the ocean transit, is where most suppliers slip, and it is the stage a buyer can least influence. Build in a buffer on the production stage, not on the shipping stage.
L/C vs T/T: The Practical Comparison
Payment terms are a trade of cost against risk, and the two main instruments behave very differently.
| Item | Letter of Credit (L/C at sight) | Telegraphic Transfer (T/T) |
|---|---|---|
| Bank cost | About 0.1-0.5% of value, plus fees | Low, a flat transfer fee |
| Security for buyer | High; payment against documents | Lower unless staged |
| Security for seller | High; bank guarantee | Lower until funds arrive |
| Speed | Slower; document checking | Fast |
| Flexibility | Low; strict document compliance | High |
| Typical use | First orders, large value, new relationship | Repeat orders, small value |
The classic L/C is irrevocable and at sight, payable against a compliant document set. It protects both sides, but it also fails on small discrepancies, and a single mismatch between the invoice and the B/L can delay payment by weeks. T/T is faster and cheaper but relies on trust and staging.
Payment Terms by Order Size and Risk
| Order situation | Recommended terms |
|---|---|
| Sample or trial order | 100% T/T in advance |
| First order, USD 20,000-100,000 | 30% T/T deposit, 70% against B/L copy, or L/C at sight |
| Repeat order, established relationship | 30% T/T deposit, 70% against B/L copy |
| Large order, new relationship | L/C at sight, or L/C 30 days |
The 30/70 split, with the balance against a B/L copy, is the most common compromise. The seller is protected by the deposit and the shipping documents, and the buyer releases the balance once the goods are demonstrably on board.
Clauses Worth Adding to the Contract
- Tolerance. Weight and quantity tolerance, and how it is settled.
- Inspection. Third party at load port, and the claim window on arrival, usually 30-60 days.
- Claim procedure. How a claim is raised, evidenced and settled.
- Incoterms. State the version, normally Incoterms 2020, and the named place.
- Force majeure and arbitration. Name the arbitration body, for example CIETAC, and the governing law.
- Documents. Exact list, including EN 10204 3.1 certificate and packing list.
Tell us the product, quantity, destination port and whether this is a first or repeat order, and we will propose payment terms and a lead time plan that fit the order, with the full document list included in the offer.
Need a Quotation for Your Project?
Send us the grade or standard, size, quantity and destination port. Our export team replies with a full quotation, usually within 12 hours.