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Business Procedure for Scrap Metals

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This supplier also supports L/C,T/T payments for offline orders.
Ferrous Steel Scrap


Business procedure for buying scrap metals



for Scrap Metals




The following business procedure is a typical one that a buyer has to follow when the buyer buys scrap metals from the qualified suppliers in N. America.  Before you take any actions, we strongly advise you to review the "Typical Export Sales Terms by N. American Major Suppliers" discussed below.


  1. You send us the end buyer's PO(Purchase Order) or LOI(Letter of Intent).  This document should be on buyer's letterhead, should be signed and sealed by the buyer, and should include buyer's banking details to allow the supplier to check buyer's financial capability.  Some suppliers require, in addition, buyer's BCL(Bank Capability Letter).
  2. End-buyer and our company set up working relationship by making a Buying Agency Agreement.
  3. On receipt of the PO or LOI, the supplier will send to the buyer a Sales/Purchase Contract, Pro Forma Invoice, and/or FCO(Full Corporate Offer).
  4. Once the buyer and supplier have agreed and signed on the Contract, Pro-Forma Invoice, and/or FCO, the deal is executed in compliance with the terms of the agreement.


Typical Export Sales Terms by N. American Major Suppliers


  • Since the suppliers receive too many new purchase orders from all over the world, they dont respond to the new purchase order until they are assured if you are able to and if you are serious enough to purchase through credit check, etc.  So if you want to speed up the buying process, you are encouraged to visit the supplier when your LOI is ready.
  • Bidding System: Target price should be provided by the buyer first in your LOI and the commodity is given to the highest bidder.  Unlike the practive in outside of N American market, price quote is not provided first by the supplier. 

    - You will have just one chance to present a target price for a bid.  There is no negotiation process.                                                                                                            - The target price should be reasonable.  If your target price is too low, your order would be rejected and the supplier no longer works with such bidder.

  • Payment Methods:

- 30% to 50% down-payment within 3 working days after the purchase contract and the rest  just before uploading or against B/L by bank wire transfer for most suppliers or

- 100% L/C that will be opened within 3 working days after the purchase contract for certain end-suppliers or

- 100% pre-payment just before uploading by bank wire transfer for certain end-suppliers

  • Incoterm: Primarily FAS/ Sometimes CFR Possible
  • Product Specification: Product specification is supposed to be written in LOI according to ISRI(Institute of Scrap Recycling Institute) code system for mutual clear understanding.  If you cant find a appropriate code, you are advised to provide a detailed product  specification along with some pictures.
Transaction History of the Supplier

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