Mistake #1: Not verifying the qualification of suppliers and relying on “Low-Price traps”.
This is a very common and deadly mistake for importers. Aggressively, some importers do not carry on a thorough review on suppliers qualifications, production capacity and reputation, as they solely look at the price when selecting Chinese steel coil suppliers, and have an obsession about controlling costs. They even work with small factories or middlemen who have neither export qualifications nor proper operations and then fall into the “low-price, low-quality” position.
In the past, the Brazilian market has experienced several instances of supposed fraud related to imported Chinese steel coils. A few suppliers catch on to importers with prices between $30-200 USD/ton below the market average by mislabeling the quality of grades, tampering with test reports, and using a “head and tail compliant, middle inferior” production process (i.e., the coating on the ends of a coil meets the standards agreed, while the coating in the middle is extensively reduced).
Poor corrosion and breakage may occur with the machine on which it operates, so that production schedules can be interrupted and safety may be at risk. However, certain non-qualified suppliers are unable to furnish such forms of documentation as certificate of origin and mill certificates, which could result in customs clearance problems.
Avoidance Guide: Prefer Chinese mills or authorized third sector intermediaries with export qualifications (e.g., ISO quality assurance system certification) and a proven experience of serving large amounts abroad; make suppliers provide business licenses, export registration certificates, and production licenses, and recent findings of steel coil tests; and require the factory to employ a 3rd party office to conduct factory inspection of their production process.
Avoid suppliers whose quotation is significantly lower than market average, and be specific with the terms quoted (e.g. including packaging, freight, testing cost), and reject cooperation models which are characterized not by cost-sharing, but by “attracting with the lowest price and add the costs to pay later.”
Mistake 2: The Contract is Defined Vaguely and Quality and Standards of Quality and Claims are Unclear.
The steel coil imports contract constitutes a fundamental guarantee: both parties have a valid guarantee of rights to import metal; and thus a minimum binding agreement which they will abide by to guarantee their claims with no uncertainty.
But some importers will use template contracts rather than applying the terms to steel coil products and not customizing them as per customer requirements, to save time. Quality standards, inspection procedures, claims, etc.—often in very broad strokes that make it tough to enforce their rights when something goes wrong.
Contractual loopholes are as follows: specific descriptions of steel coils (thickness tolerance and tensile strength & coating grade), quality standard (Does Chinese GB standard meet International ISO standard); inspection agency, inspection time, inspection process, return and exchange procedures, compensation amount, due date for bad quality, delivery time and liability of late delivery are not elaborated. For instance, several importers do not define quality checking standards for coating grade in a contract. Once they get the goods and find that the coating thickness is not adequate, but owing to the unclear terms in the contractual form, they will not be able to take compensation from the supplier.
Guideline: When entering into a contract, key clauses should include and be the following: First, specification specifications, size parameters of steel coils such as material, thickness, width, weight and coatings (e.g. AZ150, AZ200) should make sure they are clearly specified and clarify the allowable deviation range, Second, Quality standards, provide clear definitions of the national or international standards and specifications of the local or Chinese national standard adopted and require the supplier to provide original factory test reports for each batch of steel coils, compliance and inspection clauses, stipulate the methods and time to inspect before shipment (entrusted by third-party agencies (e.g. SGS, BV) to perform an inspection and to re-inspection of the cargo at port of destination, and specify the parameters of what can be determined by inspection based on that inspection).
claims, return or exchange – stipulates the compensation in terms of quality, returns/exchanges, the period of return/exchange, responsible party for freight, and methods for determination of the liquidated damages for delivery delayed by supplier; fifth, Documentation – detail must be given the complete set of documents to be complied to the supplier (invoice, packing list, bill of lading, certificate of origin, steel mill quality certificate, customs declarations, etc) that is required in return and method of handling defect in documents.
Mistake Three: Overlooking compliance requirements and errors in customs declaration and clearance.
Steel coil import involves two stages: Chinese export customs declaration and import clearance in the importing country. The compliance requirements are extremely high.
Some importers, due to unfamiliarity with the regulations of both countries or failure to prepare relevant documents in advance, experience delays in customs declaration and clearance, customs inspections, fines, or even seizure of goods.
Typical compliance mistakes are: Firstly, inconsistencies in customs declaration documents, including discrepancies in the product name, quantity, weight, and specifications of steel coils between the customs declaration, invoice, packing list, and bill of lading, especially when the weight deviation exceeds the reasonable range of 3%-5%, or when the marking information does not match the actual goods; Secondly, incorrect HS code classification. Steel coils have different HS codes depending on their material, processing technology, and use.
Incorrect classification can lead to incorrect tax rates, regulatory compliance violations (customs audits), and violation of importing country compliance requirements (Carbon Border Adjustment Mechanism (CBAM) adopted by the European Union from January 1, 2026, which applies to steel coils), etc.
Importers who fail to calculate carbon emissions in advance and prepare relevant carbon footprint certificates will face difficulties in customs clearance or be required to pay additional carbon tariffs; also, failure to handle inspection and quarantine procedures as required is a violation of this duty. Under compulsory inspection of steel coils according to the “Implementation Regulations of the Law of the People’s Republic of China on Import and Export Commodity Inspection,” steel coils are subject to mandatory inspection. Without applying for inspection or failing to pass the inspection, the goods will not be permitted for export.
If the importer does not confirm that the supplier has completed the compliance inspection and obtained a qualified inspection certificate, the goods may not be able to leave the port. Avoidance: Familiarize yourself with Chinese export regulations and the customs clearance requirements of the importing country in advance, and entrust an experienced customs broker to assist with customs declaration and clearance. Ensure all customs declaration documents are consistent and accurate; key information to consider includes product name, specifications, weight, and HS code of the steel coils.
Prepare relevant supporting documents in advance for special requirements of the importing country, such as the carbon footprint certificate required by the EU CBAM and the certificate of origin required by the importing country. Confirm that the supplier has completed the mandatory inspection by the Chinese entry-exit inspection and quarantine agency and obtained a qualified inspection certificate.
Error four: Skipping the inspection process or using non-standard inspection procedures.
Steel coils are bulk commodities, and their quality stability is affected by various factors such as production processes and transportation. Some importers, in order to save inspection costs and speed up delivery, choose to skip the inspection process or only conduct simple visual inspections, neglecting the inspection of the internal quality and dimensional accuracy of the steel coils, resulting in irreparable losses after receiving substandard goods.
In addition to the “good at the ends, poor in the middle” problem mentioned earlier, some suppliers may also conceal quality defects in steel coils by overlapping labels or tampering with chemical composition (such as adding boron to change the HS code).
If importers do not conduct proper inspections, these problems cannot be detected through visual inspection alone. However once the goods will be applied, there can be corrosion, deformation, poor tensile strength, and other problems that can lead to poor final quality products.
In addition, certain importers, even as they are concerned about how their inspected methods were decided to be carried out, have not defined inspection contents (e.g. chemical composition analysis and coating thickness testing) or delegate inspection to unreliable institutions, leading to inaccurate inspection reports.
Avoidance Recommendations: Never bypass inspection procedures; have both ‘pre-shipment inspection + destination port re-inspection’ as a dual process for inspection; trust an external authoritative organization (like SGS or BV) for the pre-shipment inspection and make the inspection items such as the appearance, dimensional accuracy, chemical composition, mechanical properties, and coating thickness of the inspection report clearly defined; have a comprehensive inspection report for the destination port. The inspection report must be carried out in a specific time period for the inspection proce