Can anyone here help me understand the competitive advantages of China Armco's base business?

The company describes itself as a distributor of ore. But what value does the company bring? Why do steel producers need to go through a distributor to get their ore? Usually distribution businesses have very small margins and can create no competitive barriers. Yet I see this company signing $10 million dollar deals. Why would someone who has ten million to spend on ore need to go through a middle man?

I like the new recycling business, and am inclined to invest in this company. But I would like to understand the base business better and get some comfort on its defensibility. Surely some existing shareholders can fill me in.