Due diligence in scrap metal recycling

The $150 billion global recyclables market operates in a uniquely challenging environment where conventional verification approaches prove inadequate. While traditional due diligence tools might suffice for standard business transactions, they fail to address the specific complexities inherent in recycling trade. Industry participants routinely encounter significant information gaps, cross-border complications, and material-specific risks that generic verification systems simply cannot evaluate properly. As regulatory pressures intensify and margins remain thin, these standard approaches leave recycling businesses vulnerable to substantial operational and financial risks. The specialized nature of recyclables trading demands purpose-built solutions designed specifically for the industry’s unique verification challenges.

The recycling market faces unique due diligence challenges that general verification tools simply can’t address:

Material Quality Uncertainty
Non-homogeneous materials with variable composition requiring specialized verification

Opaque Supply Chains
Limited visibility into counterparty reliability across international borders

Industry-Specific Risk Factors
Trading behaviors that emerge specifically during market volatility periods

Thin Margins
Operating constraints that leave little room for error in partner selection

Cross-Border Complexity
Different regulatory frameworks complicating uniform compliance

These factors contribute to an estimated 1% annual industry loss—approximately $1.5 billion—from poor quality shipments, payment delays, and fraudulent activities.

Beyond Compliance: Due Diligence as Strategic Intelligence

Tradefox transforms due diligence from a compliance checkbox into a powerful decision-making tool through our proprietary data and advanced analytics:

TrustScore Technology: The Industry’s Gold Standard

Our TrustScore algorithm synthesizes multiple verification data points including:

• Real trading outcomes from peer-reviewed experiences
• Material quality metrics from verified transactions
• Payment reliability indicators and contract adherence history
• Claim settlement patterns and dispute resolution approaches
• Comprehensive verification of corporate identity and ownership

This multi-dimensional analysis creates the recycling industry’s most reliable partner assessment metric, used by over 4,300 members across 187 countries.