Toll Processing Guidelines
Customer reject coils are defined as metal with surface and/or metallurgical defects in steel coils equal to or greater than 2,500 pounds and aluminum coils equal to or greater than 800 pounds. RC is an intermediate contractor and has liability limited to appropriate documentation and/or sampling for Customer related issues.
All non-prime coils that are the responsibility of the Customer will be held for Customer disposition. Metal issues will be documented and reported within five (5) business days after suspension. Samples or pictures of Customer issues will be made available whenever possible.
Customer’s disposition must be received within 30 days after notification of metal failure. Should coils remain in hold status for 60 days after notification, RC will transfer coils to reject status and processing will be invoiced.
If reject metal remains in RC’s inventory 90 days after disposition, RC has the option to ship the material back to the Customer or sell the reject at the Customer’s direction as secondary or scrap, whichever is appropriate, without further redress by the Customer. RC will then issue a credit to the Customer for the proceeds of the sale less applicable processing charges, a handling fee, freight charges and applicable storage charges incurred prior to selling the reject metal. Customer coils dispositioned to rework will be reprocessed on a commercially reasonable best effort basis, as RC cannot guarantee material salvage.
RC offers to administer the resale of Customer’s reject metal for a handling fee. At the time of metal shipment, a credit for the resale value will be issued to the Customer, less the handling charge and applicable processing charges.
When coils are put on-line and Customer defects are identified, RC will run up to two (2) coils before suspending the balance of production. RC will invoice all processing charges related to metal rejects whether bare, partially painted or fully painted coils, with the standard 30-day terms.
In those cases where RC stops coating a coil for causes of metal defect, and runs the coil through the line, the Customer will be invoiced 60% of the full processing charge for that coil. If the coil is more than half coated, the Customer will be invoiced 100% of the full processing charge for the entire coil.
In some cases, coils may not be suitable for the intended application but can be reprocessed on a commercially reasonable best effort basis to meet an alternate application. The Customer needs to provide a purchase order number and/or written instructions against which to reprocess and ship the reapplied metal. Customer coils dispositioned to rework will be reprocessed on a commercially reasonable best effort basis. RC cannot guarantee metal salvage. Reprocessing charges will be invoiced at the time of the reprocessing, based upon the gross weight of the metal being reprocessed.
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