Brokers
No formal exchange exists for the purchase or sale of scrap and there are no futures contracts for ferrous scrap. Instead, a broker 'makes the market' where scrap can be purchased and sold. Much scrap is sold directly by the producers and processors to steel mills and foundries, but more than half the scrap sold in the USA is traded through brokers. Brokers provide an essential link between thousands of sellers and hundreds of buyers and simplify the market, which -- by virtue of the extremely large number of suppliers and customers, grades of scrap, and shipping modes -- can be enormously complex.
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