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How to Sell Steel Scrap in Bulk: Grades, Buyers and Export
Steel scrap is the raw material of electric arc furnaces and a large export cargo. This guide is for scrap dealers who sell cargoes of thousands of tonnes to steel mills abroad.
Who exports and who buys
OEC trade data for 2024 shows world exports of ferrous scrap of about USD 44 billion. The largest exporters were the United States (14.2 percent), Germany (9.4), the United Kingdom (7.6), the Netherlands (6.8), France (6.4) and Japan (5.8). The largest importers were Turkey (18.8 percent), India (10.7), Italy (5.6), Belgium (5.6), Germany (4.7) and the United States (4.4). Turkey is the single biggest buyer, because its steel makers rely on scrap.
Grades
Scrap is sold by grade. HMS 1 and 2 (heavy melting steel) are among the most traded: HMS 1 is cleaner and thicker, and HMS 2 is thinner or more mixed. The common export blend is a mix of the two in a stated ratio, such as 80 to 20. Other grades are shredded scrap, bundles, turnings and cut scrap. The contract names the grade, the size and the share of impurities.
What buyers check
Steel mills check the cleanliness of the scrap: the share of non-metal, rust, oil, other metals such as copper that spoil the steel, and sealed containers or closed tanks that can be dangerous. Cargoes are also checked for radioactivity at loading and at discharge, and a cargo that triggers the alarm can be refused, so the dealer should test it before it is loaded.
Shipping a scrap cargo
Scrap goes in bulk on Handysize, Supramax and Panamax bulk carriers, loaded by grab or magnet, with cargoes of 5,000 to 50,000 tonnes. Check that the port can load the ship and that the quay is strong enough for the heavy pieces. Scrap is dense, so a ship fills its weight limit before its holds are full; see deadweight tonnage.
Documents and terms
The usual delivery terms are FOB or CFR; see FOB vs CFR vs CIF. Expect the inspection certificate for grade and quantity, the radiation certificate, the commercial invoice and the bill of lading; see export and import documents.
Selling on Comdity
Post a sell offer for scrap with the grade, the quantity, the origin and the loading port, and answer buyers' offers with counteroffers. Smaller yard sales of a truckload are not a good fit: Comdity is for cargo-size trade.
How scrap is priced
The price of scrap follows the price of steel and of the iron units that mills need, and it changes often. Offers are quoted per tonne for a grade and a delivery term, and the buyer deducts for impurities found at the discharge port. Ask the buyer to name the standard and the testing method in the contract, so that a claim at discharge can be settled by an independent report.
What to check before you sell
Check the buyer's ability to pay, ask for a bank instrument such as a letter of credit for a large cargo, and agree who pays for the inspection, the radiation test and any delay at the port. Make sure the port can load the ship you plan to use.
The largest exporting and importing countries (2024)
| Top exporting countries | Share of world trade |
|---|---|
| United States | 14.2% |
| Germany | 9.4% |
| United Kingdom | 7.6% |
| Netherlands | 6.8% |
| France | 6.4% |
| Japan | 5.8% |
| Canada | 4.4% |
| Belgium | 3.6% |
| Top importing countries | Share of world trade |
|---|---|
| Turkey | 18.8% |
| India | 10.7% |
| Italy | 5.6% |
| Belgium | 5.6% |
| Germany | 4.7% |
| United States | 4.4% |
| Egypt | 3.6% |
| Bangladesh | 3.6% |
Source: OEC (BACI/CEPII), 2024, customs codes 7204. The figures count trade by every mode of transport, not only by sea.
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FOB vs CFR vs CIF · Export and import documents · Offer and counteroffer · All guides