Importing Scrap Metal: A Guide to U.S. Regulations and Policies

Importing scrap metal into the U.S. can be a lucrative business, but it's not without challenges. When sourcing scrap metal from overseas, you need to make ensure its quality meets U.S. standards. This isn't always easy, as rules are complex and can change with little notice. However, with a little experience and know-how on your side, you can realize the benefits of this venture.

The U.S. Customs and Border Protection (CBP) states that importing scrap metal means adhering to regulations and quality standards. Importers must comply with environmental and safety norms, understand tariff classifications, and manage documentation for customs clearance.

We'll walk you through the whole metal importing process, from understanding these standards to ensuring your scrap metal clears customs without any issues.

Importing Scrap Metal: Terms and Definitions

Like any other import business, understanding your product is vital for success. Whether you're importing scrap metal for resale or as a manufacturing component, you'll need to be familiar with certain terms unique to the business.

Let's break down some of these key terms and their significance in the scrap metal importing process.

• Scrap Metal: Essentially, this is recycled metal. It includes bits and pieces of metal objects that are no longer in use, or parts leftover from manufacturing and usage.
• Ingot: Ingots are metal pieces of relatively uniform size intended for easy processing. They can be made of iron, aluminum, copper, and other metals.
• Pig and Sow: In metalworking, 'pig' refers to the crude iron cast into a block or bar shape using a pig casting machine. These blocks look like piglets, hence the name. The 'sow' is the main channel in the mold where the liquid metal is poured and from which the 'pigs' are formed.
• Bale: A bale in scrap metal terms refers to a compressed metal scrap import, bound together, making it easier to handle, transport, and recycle.
• Shred: Shredding is a process of cutting scrap metal into smaller pieces. This is often done to make melting the metal down easier.
• Birch/Cliff: In the scrap metal industry, 'Birch' refers to clean, uncoated, unalloyed copper wire, whereas 'Cliff' is typically the term for copper with a tin coating or soldering.
• Foundry Grade: This is a specific quality of scrap metal, suitable for use in a foundry for melting down and creating new products.
• HMS1 HMS stands for Heavy Melting Steel. HMS1 refers to clean iron and steel with a thickness of 1/4 inch or more that doesn’t contain blackened or galvanized steel. 
• HMS2: HMS2 includes steel and iron thinner with a minimum thickness of 1/8-inch that includes galvanized or blackened steel.

HMS is further categorized according to overall dimensions using an ISRI (Institute of Scrap Recycling Industries) number. 

HMS1 Scrap Metal Dimensions

HMS 2 Scrap Metal Dimensions

Source: metalmenrecycling.com

Understanding these terms and dimensions is essential for anyone in the business of reselling or processing imported scrap metals. This vocabulary not only aids in communication with suppliers and customs officials, but also helps in understanding regulations surrounding scrap metal for import.

What U.S.  Agencies Regulate  Scrap Metal Imports?

Several government agencies and systems play a key role in the process of importing scrap metal. Understanding their function and authority can help you handle the import process more effectively. 

Here’s a rundown of the major agencies involved and systems they employ.

• U.S. Customs and Border Protection (CBP): Responsible for the inspection and admission of goods into the country, CBP ensures that all imports comply with U.S. laws and regulations. They also collect import duties and enforce trade agreements.
• Environmental Protection Agency (EPA): The EPA sets guidelines to ensure that imported metals are free from hazardous materials. Their regulations help prevent the entry of contaminated scrap into the U.S.
• Department of Commerce (DOC): The DOC plays a role in the importation of scrap metal through its enforcement of international trade laws and policies. They also provide data and support to businesses involved in international trade.
• Steel Import Monitoring and Analysis (SIMA) System: The DOC uses this system to license and monitor the import of steel. This is mostly done for the purposes of adjusting tariffs. 
• Aluminum Import Monitoring (AIM) System: Similar to SIMA, but used for aluminum.
• Harmonized Tariff System (HTS) Code: This numerical code is assigned to products being imported into the U.S. CPB uses it to determine tariffs and duties.

Each agency develops and enforces its own regulations, which can sometimes overlap. It’s important to be thorough in your compliance efforts if you decide to import scrap.

How Much Scrap Metal Does the U.S. Import?

The United States is one of the world’s largest scrap metal importing countries. In 2020 alone, over 4.5 million metric tons of scrap steel, copper, and more made its way to American shores. 

The following three countries account for the lion’s share of scrap metal imported to the USA in 2020.

Source: statista.com

Even in 2023, if you plan on importing scrap metal, these three trade partners are probably the best place to start. 

Types of Imported Scrap Metal

Depending on your purposes, you may need to import several kinds of scrap metal. At a high level, they can be separated into ferrous and non-ferrous metals.

Ferrous metals are usually structural and include:

• Steel: Often made up of construction materials, old vehicles, and manufacturing scrap. It's magnetic and known for strength and durability.
• Iron: This comprises cast and wrought varieties and is prized for its strength and malleability.

Non-ferrous metals are more specialized in application.

• Copper: The conductivity of this malleable metal makes it a vital component of most electronic devices.
• Aluminum: Lightweight and resistant to corrosion, aluminum scrap comes from beverage cans, automotive parts, and more.
• Brass: Often found in plumbing fixtures, decorative items, and musical instruments, brass is a mixture of copper and zinc.
• Lead: This heavy metal is often recycled from batteries and old pipes. Due to its toxicity, handling and recycling of lead requires special care.
• Nickel: Valued for its high corrosion resistance, nickel is a key component of the formula for stainless steel.
• Zinc: Common in die-casting alloys, zinc scrap can be sourced from galvanized steel and automotive parts.

Differentiating between these types is important for several reasons; not only for recycling and processing purposes, but also for complying with regulations related to the import of scrap metal. 

How to Import Scrap Metal into the U.S.

The details of importing scrap metal into the USA will vary based on your needs. Scrap metal importers should consult CBP guidelines for the specific type or types of metal they plan to import. However, some steps are more or less universal.

If you want to start importing scrap, these basic steps will get you started in the right direction.

1. Research and Understand U.S. Import Regulations: Before anything else, familiarize yourself with regulations specific to  importing scrap metal. 
2. Identify a Reliable Supplier: Find a  supplier you can trust. Look for those with a good track record in quality and consistency. Canadian and Mexican suppliers are often the most affordable choices.
3. Verify the Quality and Type of Scrap Metal: Make sure the scrap metal you’re importing meets U.S. standards and confirm is HTS classification beforehand
4. Obtain Necessary Licenses and Permits: For instance, if you're importing steel, you'll need a SIMA registration.
5. Prepare and Organize Documentation: This includes contracts, purchase orders, shipping documents, and any other required paperwork.
6. Logistics and Shipping Arrangements: Decide on the best way to bring your goods into the country (sea, air, or land). Ensure that the metal is packaged and labeled to comply with CBP regulations.
7. Customs Clearance: This involves declaring your goods, paying any applicable duties and taxes, and undergoing any necessary inspections.

Remember: navigating U.S. customs can be complex. A customs broker can help manage this process, ensuring that your scrap metal is cleared quickly and without issues. 

Accurate documentation calls for professional assistance. A hassle-free import process starts with the right support services. 

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Importing Scrap Metal to the USA: Required Documents

One constant of importing is having the right paperwork in place. This is necessary to ensure quick, trouble-free customs clearance. 

Here’s a list of paperwork the CBP expects to find with most U.S. import shipments:

• Commercial Invoice: This provides details about your shipment, including the type and value of the scrap, the exporter, and the importer.
• Bill of Lading: Issued by the import’s carrier, this document functions in much the same way as a receipt.
• Packing List: The packing list specifically identifies goods in an imported shipment. It details the amounts and descriptions of the scrap metal you're importing.
• Import License (if required): It’s important to check with U.S. Customs and Border Protection (CBP) or a customs broker to see if your specific type of scrap metal requires a license.
• Certificate of Origin: This document is used to identify the shipment’s country of origin.
• Arrival Notice: Issued by the carrier or freight forwarder, this notice informs you of the arrival of your shipment.
• ISF (Importer Security Filing): For goods arriving by ocean vessel, an ISF must be filed with the CBP before the goods enter U.S. waters. 
• Entry Summary (CBP Form 7501): This form is used to declare the nature, value, and duties due on goods entering the U.S.
• Customs Bond : A bond will be required for any shipment valued at $2,500 or more. 

Accurately completing these documents is required to make sure your scrap metal import meets CBP regulations. 

For specific details and any additional requirements, consulting with a customs broker can provide guidance for your particular importing needs. While it may seem like another expense eating into your profits, a broker can prevent expensive fines and keep your shipments moving quickly through customs.

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Scrap Metal Tariffs and Duties

Given the wide variety of materials covered by the term ‘scrap metal’, duties and tariffs will differ. You’ll need to find the HTS code of your imported metals early in the process. CBP uses this code to determine what duties importers owe on their shipments.

While CBP does make the rules, it’s up to the importer to determine and pay duties and tariffs correctly. If you don’t meet these regulations, you may incur expensive fines.

Keep in mind that while duties take time and a great deal of scrutiny to raise or lower, authorities in the USA can impose tariffs almost on a whim. This is important to remember because, as of this writing, the most notable tariff on metals is a 70 percent tariff against Russian imports. 

How USA Customs Clearance Can Help 

Importing scrap metal has many benefits, not just for businesses, but for the environment as well. However, bringing scrap into the USA can be a challenge without the right help. That’s where we come in.

USA Customs Clearance brokers have over a century of combined experience assisting businesses who need to bring imported goods to the United States.  No matter what questions or complications you face in your import journey, we have the know-how you need to excel.

Trust our team for assistance with:

• Customs brokerage
• Import consulting services
• New importer bundles
• And more

Don’t be deterred by the complexity of U.S. customs. Give us a call at (855) 912-0406 or contact us online today. We’re standing by to help you with every aspect of the import process.