Companies in this industry engage in wholesale distribution of automotive scrap, industrial scrap, and other recyclable materials. Major scrap metal wholesalers include America Chung Nam, Commercial Metals Company, and The David J Joseph Company (all based in the US), as well as ELG Haniel and TSR Recycling (Germany), European Metal Recycling (the UK), and Sims Metal Management (Australia).
Demand from the steel, auto, and construction industries drives the scrap metal wholesaling industry. The profitability of individual companies depends on cultivating relationships with suppliers and buyers. Most companies are small and compete by specializing in one type of material in their local market. Large companies have economies of scale in purchasing equipment and transportation. The industry in the US is fragmented: the top 50 companies account for about 45% of revenue.
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Major sources of revenue are ferrous metal scrap (iron and steel), which accounts for about 50% of sales, and nonferrous metal scrap (mainly aluminum, copper, copper alloys, lead, and zinc), which accounts for about 30%. Other sources of revenue include paper, plastics, and textiles.