Final Thoughts

Two different eras

Being a longtime scrap trader who has spent most of his career servicing integrated steel mills, it is tough to see them go in the United States. In today’s EAF era, buying scrap is becoming more “push button.” The role of the scrap broker has been diminished to the point where mill purchasing agents can do the job. Most mills try to buy directly from scrap processing facilities, thereby leaving out the broker. 

In this case, they feel they save the commission, and that’s fine for these EAF-based mills. But the truth is most scrap brokers really didn’t make much money from the small commissions they were allowed by mills and dealers.

During the rash of Chapter 11 bankruptcies by steelmakers in the mid-1980s and the late 1990s, it was the scrap broker who absorbed most of the losses. It wasn’t the average dealer who got paid by the broker. The trade better hope we never enter this type of economic problem again. The scrap broker may not be around then.  

Today, there are not as many opportunities to make a buck with the EAF mills.

That certainly wasn’t true with the integrated plants of the 20th century. These mills presented a professional trader with a plethora of materials with which we could buy and sell for the benefit of both parties. 

Integrated mills and scrap

Integrated mills generate considerable home scrap that needs to be turned into cash if it can’t be used internally. Items like sulfur butts and tundish skulls needed to find external homes. Many times, the scrap trader could find buyers through their company’s wide connections throughout the industry.

The blast furnace and its basic oxygen furnace partner generate large amounts of ferrous products and waste. For instance, the BF generates several types of raw iron while slagging off the furnace. These include Beach Iron, Blast Furnace Iron, Kish Iron, Runner Iron and Skim Iron, to name a few. You won’t find many of these grades in the Recycled Materials Association (ReMA) scrap specifications.

To intelligently market these items, a trader needed to know the different Fe yields and chemistries of these products to recycle them to their proper metallurgical uses. They also needed to know at what stage of the ironmaking process these products were generated. Is this trading skill dying out along with the diminishing role of the BF?

Other waste products include blast furnace slag, BOF slag, A, B, and C scrap, iron ore pellet fines, and millscale (which EAF mills also generate). Many of these products are sold to other non-steel industries such as cement making, glass-making, and road construction. 

So, as the blast furnace era continues to be overtaken by EAFs in the US, we may be saying goodbye to the ferrous scrap brokers and their aging traders. They helped grease the wheels of the steel industry’s raw materials procurement and disposition sectors. Sure, times change. But you can still be nostalgic.