Opinion ID: 278888
Heading Depth: 1
Heading Rank: 2

Heading: industrial facts

Text: 8 At least 98 percent of the iron and steel scrap consumed in the United States is purchased by the producers of iron and steel. Scrap and pig iron are the principal metallics used in making iron and steel. Part of the scrap used in the production process is generated as a waste product of the mills' own activities and is referred to as 'home scrap.' This constitutes about one-half of the scrap consumed by producers. The remainder must be purchased from outside sources and is referred to as 'purchased scrap.' Sources of purchased scrap include railroads, industrial materials, ships, automobiles, discarded household appliances, etc. 9 Much scrap is collected by a vast army of junk dealers and peddlers who make regular rounds for this purpose. These junkmen usually sell their scrap to larger dealers who in turn sell directly to the consumer or to brokers. Approximately 90 percent of all scrap used is purchased either from dealers or brokers. Scrap brokers, as that term is used in the industry, has reference to persons who purchase and sell scrap for their own account, taking title to it and assuming all the risks incident to ownership. In effect they are wholesale dealers, but do not take physical possession of the material. Scrap dealers, on the other hand, operate yards where they take possession of the scrap, sort and process it. There is no hard and fast line differentiating brokers from dealers since in many instances, a dealer may act as a broker and some brokers also own yards where they operate as dealers. 10 Brokers derive their profit from the difference between what they pay for the scrap and what they can get for it. In general, they aim at a differential of $1.00 a gross ton, but because of market fluctuations and varying competitive conditions, the brokerage business is highly speculative.