You have the math right, but the product wrong. They are looking for specific types of steel that are currently unavailable at almost any price. Their order size is too small to warrant returning a phone call from normal steel producers. Certain types of tool steel that are currently available sell for upwards of $3000/ton, but the type of steel they need is no longer a commodity, so the price is likely even higher.
They have 50 tons of scrap steel that is exactly what they need, but need a spot to melt it down for reuse. You can't (partially guessing here) just throw it in an existing smeltery while maintaining its purity. They have been collecting this scrap by talking to other users that also use the same material.
The article mentions they are in the Jura Arc. I didn't know this, but that is a reference to the watchmakers valley in Switzerland. If you're selling a $60k watch, it better be made from 99.999999% pure unobtanium.
I have seen similar situations before where when you start making a niche product, suddenly demand pops out of the background that wasn't there before because the product simply wasn't available. Even if it isn't profitable from day 1 it might eventually become profitable.
Are you sure about that "unavailable at almost any price" part? Their initial inputs seem to be be the scraps produced by the local manufacturers in a relatively tiny area over the last few years. If this grade of steel wasn't available, where did all these local manufacturers get a constant supply from? (I.e. there has to be an existing and supplied market, it's not like they're recycling the steel only from the scuttled German battleships in Scapa Flow or something.)
The use cases are quoted as "watchmaking and medical subcontracting", fwiw.
Yeah, I'm not sure about that unavailable at almost any price part. If you could put in an order for a million tons of steel you would get on the steel manufacturers order list, which is what I was thinking about when I mentioned almost any price. But it sounds like they have been working through their existing material for decades and are only now running out. The material may have last been produced a long time ago so the quantities they need are very small. That 50 tons of scrap may last them for another decade or two.
You would not be able to throw it in a ‘smelter’ and have it maintain its chemistry - smelters are huge mass production shops. A foundry could do this without problem. They exist to do small, chemically precise runs.
A few year ago, someone posted about designing a new stainless steel for ¿knives? Something about copying the properties of some well known iron alloy to a stainless version. IIRC you should add some chrome to make it stainless and vanadium to make it hard, and then some long explanation about the carbon content so there is not a lot of ¿chrome carbide? inside the steel. He hired a specialized foundry to make a small batch with very precise composition. It was very interesting but very above my metallurgy knowledge, so I don't' remember the details. And sadly I can't find the link now.
I believe it was this post? If not I'm curious about it if you remember. The link and discussion here was a fascinating look into another world for me.
They have 50 tons of scrap steel that is exactly what they need, but need a spot to melt it down for reuse. You can't (partially guessing here) just throw it in an existing smeltery while maintaining its purity. They have been collecting this scrap by talking to other users that also use the same material.
The article mentions they are in the Jura Arc. I didn't know this, but that is a reference to the watchmakers valley in Switzerland. If you're selling a $60k watch, it better be made from 99.999999% pure unobtanium.
I have seen similar situations before where when you start making a niche product, suddenly demand pops out of the background that wasn't there before because the product simply wasn't available. Even if it isn't profitable from day 1 it might eventually become profitable.