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    December 15, 2023

    Miller on scrap: The diminished role of the scrap broker

    Written by Stephen Miller

    Over the last two decades, the role of the scrap broker has been diminished in favor of steel mills purchasing their scrap requirements directly from scrap dealers. The theory is they save the commission the broker would potentially earn. Is there really any advantage to this or are scrap buyers ignoring the several advantages of dealing with a scrap broker?

    In the 1970s, the allowable broker commission deducted from the mill buying price was $2.00 per gross ton. It rose to $3.00 in the 1980s. Today, it’s roughly $5.00, but the price of scrap has tripled over this span. So, on $400 scrap, this amounts to about 1%. Nobody is getting rich here!

    Stephen Miller

    Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40-plus years, he has worked in all capacities in the trading business. He has had positions in both domestic and international scrap trading. In addition to scrap, Miller was at the forefront of the pig iron trade and established a pig iron distribution company under the name of Ferrosource, Inc. Most recently, Miller has concentrated on the scrap export market and regularly does consulting for several companies in the industry.

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