Ferroalloy Purchase Contract: 7 Clauses Your Technical Specification Must Get Right

What you write into the technical specification decides what you can reject on arrival — but only if that specification is actually part of the contract. Disputes in ferroalloy buying rarely come from having no quality requirements at all. They come from quality requirements that sit in a quotation attachment but were not incorporated into the contract, or a chemistry clause that names the main element but not the impurity limits, or a particle size range with no distribution behind it. The seven questions below are the ones that come up most often at order confirmation, and get left out most often.

1. Is the technical specification actually part of the contract?

Not necessarily. That depends on whether the contract contains an incorporation clause. A specification that has not been incorporated is likely to be treated as reference material rather than as something you can claim against.

This is the cheapest clause to add and the easiest one to skip. A quotation attachment, a parameter table confirmed by email, a screenshot of a spec sent over chat — whether any of these carry force does not depend on how accurate they are. It depends on whether the contract body has a sentence pulling them in.

The usual wording looks like this:

Annex 1, Technical Specification, forms an integral part of this contract and has the same legal force. In the event of conflict between the specification and the contract body, 【state the order of precedence: contract body / technical specification】 shall prevail.

The second half of that sentence is the part that does the work. Most people write only the first half, and then both sides turn up holding different versions of the specification, each saying theirs is the one.

An incorporation clause has to fix three things:

One practical point about how this trade actually works: the proforma invoices issued by many Chinese suppliers carry product name, quantity, unit price, delivery time and total value — and no specification field at all. Asking for the specification to be written into the PI, or attached and signed as an annex, costs almost nothing. It makes a considerable difference if a dispute arises.

2. Is naming the main element enough for chemistry?

No. Three elements have to appear together: the main-element window, the impurity limits, and the test method standard. Drop any one of them and the other two become negotiable.

The main-element window is not “Si ≥ 75%”. It is “Si 74.0–76.0%”. A lower limit and an upper limit — the upper one is often left out, yet for products like nodularizer, Mg on the high side makes the reaction too violent. Higher is not automatically better.

Impurity limits are where quotations actually diverge. Ferrosilicon is traded with aluminium at 1.5%, 2.0% and 3.0% levels, at different prices. A contract that says only “Si ≥ 75%” and sets no aluminium ceiling is, in effect, accepting the highest aluminium grade available — which is also the one that quotes cheapest.

The test method standard determines whether two numbers can be compared at all. The same sample tested to different standards can give measurably different results. State “tested per GB/T ××××” or “per ISO ××××”, and say which one governs.

Broken down by product, the chemistry clause needs to cover at least this:

The nodularizer row deserves a line of its own. MgO is magnesium already locked up by oxidation; it does no nodulizing. Two suppliers both quote FeSiMg8RE3 with the same Mg figure on paper, but MgO at 1.2% and MgO at 2.8% are not the same product — the foundry makes up the difference by raising addition rates, and that is exactly where the “cheaper” quotation stops being cheaper. If the number is not in the contract, there is nothing to point at afterwards.

3. Should particle size be written as a range or as a distribution?

As a distribution. A bare range hands the interpretation of the clause to the other side.

“10–50 mm” reads as clear, but it permits two entirely different cargoes: one that is 95% near-upper-size lumps plus 5% fines, or one carrying 25% fines. Those are not the same product, and both satisfy “10–50 mm”.

What works is a range with distribution limits attached:

Particle size 10–50 mm, of which > 50 mm not exceeding 5% and < 10 mm not exceeding 5%.

Set the actual percentages against your bath capacity, temperature and contact time — but write the percentages in.

Three more items routinely go missing from this clause:

Why this deserves effort in a contract: particle size sets how fast the alloy dissolves, which sets how much of it actually enters your steel or iron. Too fine and it oxidises on the bath surface or is carried off with the slag; too coarse and it sinks before it melts, turning into a recovery loss — or worse, an inclusion in the casting. This is a metallurgical parameter, not a packaging preference.

4. What exactly does the price basis clause have to fix?

Four things: reference grade, adjustment rate, settlement weight, and the trade term with its port. Until those four are pinned down, the numbers on two quotations are not comparable.

The adjustment rate deserves the closest reading. Clauses are often written as “adjusted both ways on actual grade”, which sounds even-handed but tends to cut against the buyer in practice: below the reference grade the deduction is applied as agreed, while above it the supplier argues that better quality carries no premium. If you want it symmetrical, write both rates in. If you only want floor protection, say so explicitly: “below reference grade, minus X USD/tonne per 0.1%; above reference grade, no adjustment.”

State the year and the port with the trade term. Incoterms 2020 is the current version in use — write “FOB Tianjin, Incoterms 2020” rather than just “FOB”. The term decides at which point risk passes from seller to buyer: on deck, at the ship’s rail, or after discharge at destination. Who carries loss in between depends entirely on that one line.

5. Who samples, where, and to which standard?

This is the core of the inspection clause — more important than what the test result turns out to be. Most disputes are not about the number. They are about whether that number represents the cargo.

The sampling clause has to fix three things:

Sealing retain samples is the most useful part of this clause. It can be written like this:

At loading, both parties shall jointly draw and seal three retain samples, signed by both. Each party holds one; the third is held by 【third-party institution / buyer-nominated warehouse】 and kept until 【N】 months after the claims period expires. In the event of disagreement over test results, the retest of the sealed retain sample shall govern, conducted by 【a third party acceptable to both / named institution】.

Why it is worth writing in: without sealed retain samples, a retest means sampling again — and sampling again takes material from a different portion of the lot. The dispute turns into a loop of “the sample you took does not represent this cargo”.

Set out the physical requirements as well: bagged, sealed, tamper-evident seal, signed by both parties, photographed. Without those, “sealed retain sample” is just a phrase.

6. When does the claims period start?

Leaving this clause out entirely is the most expensive blank space in a ferroalloy contract. Plenty of contracts set quality requirements and test methods and then do not say how long a buyer has to raise a problem once they find one. When something does go wrong, “the objection period has expired” is enough to zero out every clause above it.

Three elements have to be stated:

The starting point. There are four in common use: date of loading, date of arrival, date of discharge, date the defect was discovered. “Date of discovery” favours the buyer but is often the sticking point in negotiation; “from date of discharge” is the usual compromise.

The length, split by type. Short for appearance and quantity, long for latent quality — because latent quality usually only shows up once the material reaches the furnace.

The test to apply is concrete: the latent-quality period has to cover the time from discharge to charging. If the contract says 30 days and your stock turns in 45, the objection period expires before the last of the material is even used. Work backwards from your actual consumption rate instead of copying a template number.

How notice is given and what evidence is required. Written notice, a designated email address, whether copies are required, and which documents have to accompany it (photographs, seal numbers, sampling records, retest report). If “what counts as notice” is not written down, the other side can say it did not arrive.

And finally, the consequence. After a failed retest, then what: return, replacement, price reduction, or compensation? Is there a cap on claims, often a percentage of contract value? Leave these out and you can win the retest and still recover nothing.

7. How detailed should the packaging, marking and documents clause be?

Detailed enough to inspect against directly. The job of this clause is to turn “what arrives is what was loaded” into something checkable.

Insisting on the heat number printed on the bag is the item most worth holding out for. It is the physical basis of traceability: when the heat number on the certificate, on the packing list and on the bag all match, the paperwork is genuinely traceable. Mark only the product name and no heat number, and there is no way to trace a problem back to a specific melt.

The moisture provisions matter particularly for ferrosilicon. It can disintegrate under damp conditions and, where moisture is present, may release phosphine and arsine gas. That is a documented handling risk in ferroalloy storage and transport, not quality gossip — and it is the reason packaging and container condition belong in the purchase specification.

Summary: technical specification clause checklist

The table below works as a drafting checklist, or as the line items of Annex 1.

The one thing to remember

The value of a technical specification is not how many items it lists. It is whether, on the day of the dispute, you can point at one specific number and say: this one does not match.

What is not in the contract is not something you asked for.

FAQ

Does a trial or small order need a technical specification too?

Yes — more than a full one does. The point of a trial order is to find out whether the supplier can deliver consistently. Without a specification you finish the trial with no baseline to compare against, and the second order is another trial. The clauses can be trimmed, but keep incorporation, chemistry window and particle size distribution.

Does a specification confirmed by email count?

That depends on whether the contract incorporates it. Email exchanges can form part of a contract, but only where there is no ambiguity about which email and which version. Where a specification was revised several times, an email thread can easily contain two versions. Naming one annex in the contract, with version and date, remains the safer route.

If the English and Chinese versions of a contract disagree, which governs?

Whichever the language clause says. Without one, each side tends to argue for its own version in a cross-border deal. State that the English version prevails (or name the governing version), and use only that language in the annexes — otherwise you can end up with two specifications that differ in substance and both carry force.

What if the supplier refuses a claims period?

Secure the objection period at minimum, even if it is shorter than you would like. The fallback is to move the evidence point earlier: require third-party inspection before loading, joint sealing of retain samples at loading, and photographs. Inspection and retain-sample clauses are usually easier to agree than a claims window, and they do much of the same work in a dispute.

What we do

Henan Longchuang Metallurgical Materials supplies steel plants and foundries with RE Mg ferrosilicon (nodularizer), inoculants, alloy cored wire, ferrosilicon, and manganese and chromium series alloys — over 20 product lines.

Against those seven clauses, what we do:

• Incorporation— the technical specification is signed as a contract annex at order confirmation, with version and date stated, rather than confirmed verbally over email. 【Insert our order confirmation clause】
• Chemistry— each lot is tested before dispatch and ships with a test certificate; composition is held to the window agreed in the order and is traceable by heat number; material that fails testing is not put into storage, is not shipped, and is not blended into other lots. 【How the COA is issued: with goods / by email / QR code — fill in as applicable】
• Particle size— supplied to the range you specify, with oversize and fines percentages agreed in the order, along with the sieve standard and test timing.
• Price basis— reference grade, adjustment rate and settlement weight are written on the quotation, not left until after results are out.
• Sampling and retain samples— jointly drawn and sealed at loading, signed by both parties, photographed; in case of disagreement the sealed retain governs. 【Insert our retain sample practice】
• Packaging— lined jumbo bags as agreed, heat number marked on every bag, loading photographs provided.

Send us your target composition, monthly volume and destination port — quotation and available tonnage within 【12 hours】