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Enron Chicago Depot
Questions and Answers

Q: What are the benefits of the Chicago Depot to our customers?

A: By taking advantage of Enron's Chicago Depot opportunity, our customers can save money and time - allowing additional resources to help further grow their business. Key benefits include:

  • Competitive Pricing - Enron's financial strength and experience in commodity markets enable us to purchase and store steel at competitive prices. Enron's presence in other commodity markets also allows us to achieve economies of scale with freight companies, resulting in lower transportation rates for our customers.
  • Just-In-Time Delivery - Enron can guarantee delivery of the product you need within 48 hours of order placement.
  • Reduced Inventory Carrying Costs - The ability to secure supply on a just-in-time basis allows our customers to reduce the amount of inventory in their warehouses, as well as the length of time they carry it. Customers then have access to capital that can be applied toward additional cost-saving opportunities. Enron's higher credit rating allows us to hold inventory at a lower cost, and these savings are passed on to our customers.
  • Reliable Supply - Enron's market position guarantees us a reliable supply of product to offer our customers on a just-in-time basis.

    Q: What products is Enron Steel offering to customers in the Chicago area?

    A: Initially, Enron Steel is offering base, commodity grades of carbon Hot-Rolled and Cold-Rolled Steel Sheet in Coil. We carry commercial-quality grade HRC in accordance with ASTM A 1011 Grade B ordered to an AISI C 1008 chemistry. This grade is available in a gauge range of 14 to 7 in standard widths of 48 and 60 inches. In addition, we carry heavier thicknesses for structural applications conforming to ASTM A 635 for conversion to A 36 plate. These items are available in 3/16 through 1/2 inch and in widths of 48, 60 and 72 inches.

    For CRC, we offer ASTM A 366 commercial quality with a chemistry to AISI C 1006/1008 with regular matte finish in a gauge range of 22 to 14 in 48, 60 with some 36-inch widths.

    As the Enron depot concept develops, it is conceivable that we will carry standard HRC pipe grades in a chemistry range of AISI C 1017 to 1022 and 1010 modified for mechanical and structural pipe and tubing applications.

    photo of steel pipes Q: In addition to the Chicago Depot concept, what other products and services does Enron Steel offer?

    A: As a market-maker, Enron buys steel from sellers and sells steel to users. Enron acts as a principal in these buying and selling transactions, providing much-needed liquidity in the marketplace. By creating commodities out of similar commercial-grade products, Enron provides valuable pricing benchmarks for base products, against which premiums can be set for any enhanced products.

    Enron also acts as a "risk intermediary" by using the price-protection instruments we pioneered more than a decade ago for the volatile energy industry. Now, the steel industry can financially hedge steel prices without disrupting commercial relationships. Steel buyers have the opportunity to set their prices over the terms of their contracts, instead of paying fluctuating market rates. The results are more predictable earnings, stabilized cash flows and informed investment decisions.

    EnronOnline (www.enrononline.com), our web-based platform, allows the steel industry to buy and sell physical steel or our financial products in a real-time, competitive marketplace. EnronOnline is principal-based and commission-free, and all products ordered through EnronOnline are guaranteed delivery.

    Q: How can I find out more about Enron's Chicago Depot and its other offerings for the steel industry?

    A: Enron knows each customer's business is unique. That's why we provide customized solutions to best meet our customers' needs. And we offer a variety of ways to do business with us. Via phone, fax or EnronOnline, Enron is ready to work with you. Additionally, we will be sending out our Chicago Depot prices via fax (or e-mail if you prefer) on a weekly basis, so you're always up to date on the latest pricing. Please visit our web site at www.enron.com/steel for additional information, or call our Steel Desk at 1.866.327.3333.








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