What is scrap metal trading?
Scrap metal trading is the sourcing, purchasing and selling of recyclable used metal to international users.
The scrap metal industry is a dynamic and growing industry. Estimated to be worth billions of dollars of international trade annually, different grades of scrap metal are shipped to and from various ports around the world.
Shipping of scrap metal happens in two ways. Either the scrap is loaded into ocean containers or loaded bulk into vessels. Smaller transactions between 20ton (1 container) to 3000ton (approx. 135 containers) are shipped in ocean containers, but larger transactions are shipped in “bulk” in-vessel hatches, up to 25,000mt per loading.
As international supply and demand grow for scrap metal, it opens a market for traders to buy and sell scrap metal from yards, steel mills and to other traders. Every country around the world produces some form of scrap metal. From tiny Caribbean islands to the USA and the Middle East, there are opportunities for traders to source, purchase, export and sell scrap metal to users around the globe.
So why would an importer purchase from a trader?
Importers are usually the end-user of scrap metal. They would be a furnace, local re-seller, or steel mill. Scrap metal traders create value-added supply chains, which importers can reply on.
There are various benefits of an importer purchasing from a trader some of these include:
- The scrap metal trader has a diverse portfolio of sources it can procure material from.
- It takes care of logistics such as local transport for loading, and international shipping.
- Offers the importer flexible payment terms (usually letter of credit), while having to pay for logistics and material in advance.
- Takes care of currency exchanges (local to USD$)
- Monitors the loading of materials around the world.
- A close working relationship can be developed between the importer and trader.
It can be seen there are many benefits for an importer to work with and purchase from a scrap metal trader.
So, what does a trader need to consider when sourcing and selling to its customers?
- Spend time and diligence to purchase from reliable sources.
- Make sure it has the finance to arrange the shipment.
- Monitor and travelling to loading to make sure quality & weights are correct.
- Work with a freight agent to arrange international shipping.
- Ensure scrap metal can be exported from the country of loading.
- Have a payment agreement with the importer, such as a letter of credit.
International scrap metal traders such as Tiger International Limited, who are proactive in all areas and have long-standing business relationships with buyers and sources are creating valuable partnerships and supply chains around the world.