Scrap market

Quality verification in the scrap market relies on ISRI (Institute of Scrap Recycling Industries) specifications. You must ensure the supplier provides a detailed chemical analysis report (Mill Test Certificate) and clearly defines the grade, such as HMS 1 & 2 (Heavy Melting Steel) or Copper Birch/Cliff. For high-value non-ferrous metals, request spectrometer testing results to confirm purity levels and ensure the impurity threshold (e.g., dirt, oil, or non-metallic attachments) does not exceed the agreed percentage, typically below 1-2%.

Cross-border scrap trade is strictly regulated by the Basel Convention regarding hazardous waste. You must verify that the supplier holds a valid Export License and that the material is not classified as 'toxic waste' in the destination country. Ensure compliance with ISO 14001 (Environmental Management) and check for AQSIQ registration if shipping to specific Asian markets. Always demand a Radiation-Free Certificate to ensure the scrap has been scanned for radioactive contaminants.

Economic feasibility is determined by the LME (London Metal Exchange) index or Comex pricing. Since scrap prices fluctuate daily, you should negotiate a pricing formula (e.g., LME minus a specific discount) rather than a fixed price for long-term contracts. Factor in the yield rate (recovery rate); for example, if purchasing aluminum scrap, a 90% recovery rate is significantly more valuable than an 80% rate. Always calculate the landed cost, including high-density shipping rates and import duties.

For industrial melting, specify the physical dimensions (baled, sheared, or loose) to ensure compatibility with your furnace size. Density requirements are crucial for logistics and melting efficiency; for instance, HMS 1 should have a density of at least 0.7 tons per cubic meter. Additionally, specify the maximum allowable levels of 'tramp elements' like sulfur, phosphorus, or copper in steel scrap, as these can affect the structural integrity of the final recycled product.

The most significant risk is material substitution or 'short-weighting'. Fraudulent suppliers may load high-quality scrap at the container door while filling the back with concrete, dirt, or lower-grade waste. To mitigate this, always hire a reputable third-party inspection agency like SGS or CCIC to supervise the loading process and seal the containers in person. Never rely solely on photos provided by the seller.

Avoid 100% advance payments. The safest method is a Transferable Irrevocable Letter of Credit (L/C) at sight, payable only after the presentation of a clean Bill of Lading and a third-party Inspection Certificate. For new suppliers found on Made-in-China.com, utilize their secured payment services or audit the supplier's Gold Member status and business license to ensure they are a legitimate yard owner and not a middleman.

Focus on transparency and long-term volume. Professional suppliers prefer buyers who understand market indices. Negotiate based on weight bridge tickets from the port of loading versus the port of discharge. Clearly define the claims procedure in the contract: if the moisture content or impurity level exceeds the limit, there should be a pre-agreed price deduction formula to avoid lengthy legal disputes.

Scrap metal is heavy and can damage standard containers. Ensure the supplier uses heavy-duty containers and follows proper weight distribution guidelines. Be aware of demurrage and detention risks at the destination port due to customs inspections; negotiate at least 14-21 days of free time with the shipping line. Ensure all HS Codes (e.g., 7204 for ferrous scrap) are accurately declared to avoid heavy fines for 'illegal waste' importation.