Why do companies/individuals sell their metal to scrap dealers instead of selling directly to the foundries?

Answer. There are various reasons why most scrap metal material is sold to scrap dealers instead of directly to the foundries. One is the issue of processing before the foundries can use the material.

A scrap dealer will sort out the different types of metals and ensure the sizes are adequate before sending it to a foundry for melting. Another is one of capital investment - should the foundries consider running such an operation themselves, they would have to maintain a fleet of trucks and secure extra premises to dump and process the scrap steel they bring in. Thirdly, most companies do not produce enough scrap to meet the demands of the foundries as they require large volumes of material to ensure their furnaces run efficiently and cost effectively.

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