Daily Market Note — 2026-08-20
Market commentary on the global ferrous scrap trade. Not trading advice.
The read
Yesterday’s note described a gap between what the exchange thought Turkish scrap was worth and what assessors of physical cargo thought. That gap closed, and it closed from the physical side — downward, on real business.
Turkish mills returned to the deep-sea market on Wednesday after a short pause. Three bookings were heard: a Marmara mill on US-origin 85:15 at $378.50 a tonne CFR, an Izmir mill on US-origin 80:20 at $375.00, and an Iskenderun mill on Baltic-origin 80:20 at $369.50. The main US-origin index re-based $3.77 lower to $375.21 — within three cents of where it stood a week ago, having gone up and come back in four sessions.
The move matters less than the convergence. For a fortnight the index sat several dollars clear of the last confirmed cargo, so a seller quoting “the index” was quoting the highest number available on the grade. Index, deal tape and a second publisher’s assessment are now within fifty cents of each other — and when assessments and transactions agree, the assessment stops being an argument.
Note too that those three cargoes span $9 across two origins on one day. European material still clears at a discount to American, and that spread, not the headline, is where the room is.
Key moves
US export pricing softened rather than merely held. The HMS 80:20 export index FOB New York was assessed $2.00 lower at $330.50, while the West Coast equivalent held at $323.00. Weekly trade reporting still describes the East Coast export market as unchanged; the daily index disagrees slightly, a difference of cadence rather than fact.
Pakistan published a record import month. July scrap imports reached 408,041 tonnes — up 24.6% on June and 42.6% year on year — worth $243.6 million, with total iron and steel imports at 518,392 tonnes (+32.6%). June was 323,896 tonnes, making this a second consecutive surge and the largest month in the series.
That is real evidence of structural import dependence. It is also two-sided: 84,000 tonnes more than June landed somewhere, and a mill that has just taken delivery is not a mill in a hurry. A record import month raises the odds that a given buyer is comfortably covered rather than short. The published shredded import index for Port Qasim has not refreshed since Tuesday’s $417.33.
Freight and shipping
Hormuz traffic was reported at nine commodity vessels on Wednesday, unchanged from Tuesday — roughly 6.5% of the pre-war norm of 130–140 a day. Holding steady at that level does not make it normal.
The count has now been revised four times in nine sessions, with the same Tuesday reported as both six and nine vessels by consecutive updates. Read it for direction, not precision. The durable evidence is behavioural: large shipowners still avoid the route, and major Chinese state shippers have kept vessels out of both Hormuz and Bab el-Mandeb since late July.
Oil rose for a fifth consecutive session — Brent near $92.82, WTI near $86.75, both three-week highs. Worth adding: analysis this week frames the disruption as a refined-product shortage as much as a crude one. Bunker fuel is a refined product, so shipping costs can keep rising even if crude steadies.
Nothing has left the carrier surcharge stack in twenty-four checked sessions — a $300/$500 peak-season charge to Pakistan, a $500 Northern Europe congestion charge, a Middle East fuel surcharge and a $35 per TEU operations charge. On a 28-tonne box, $500 is $17.86 a tonne; on 25 tonnes, $20.00. That $2.14 gap often exceeds the concession being argued over — achieved payload is a commercial term, not a logistics detail.
Supplier markets
Rhine water has improved slightly from record lows — the first change of direction in this episode — but remains severe enough to disrupt cargo movement, with road and rail substitution continuing.
The adjective moved; nothing operational did. No gauge reading or inland cost has been published for four sessions, so the useful question to an inland German supplier is unchanged: is the material already at port, and what does the inland leg cost per tonne? Port-adjacent Low Countries supply stays better placed on the same logic that has held for eight sessions.
Non-ferrous snapshot
Official settlements for 19 August: copper cash $14,180 against $13,890 three-month, zinc $3,750 and $3,652, aluminium $3,191.50 and $3,212.
Two features outrank the levels. Copper has fallen $670 on cash in two sessions, with three-month below $14,000 for the first time this month — yet its backwardation widened to $290. A falling outright with a widening prompt premium argues for same-day pricing more strongly than a rising market does: the spread moves against a slow-fixing buyer even while the headline falls.
Aluminium is the only metal in the complex in contango, at $20.50 and widening. Exchange stocks sit at multi-decade lows — a real fact — but a market genuinely short of prompt metal does not pay to defer delivery. Warehouse scarcity and yard scarcity are different things.
On policy: US export restrictions on black mass and tungsten-containing scrap begin 27 August, for one year, subject to case-by-case waivers. Stricter EU rules for non-OECD destinations not on the authorised list apply from 21 May 2027.
Glossary
- CFR — Cost & Freight; the quoted price includes ocean freight to the buyer’s port.
- HMS 80:20 / 85:15 — Heavy Melting Scrap mixes of grades 1 and 2; the higher the first number, the better the grade.
- Cash vs three-month — metal for immediate versus three-month delivery. Cash above three-month is backwardation (prompt tightness); below is contango.
- Index vs deal tape — an index is an assessor’s view; the deal tape is what actually traded.
- Payload — tonnage actually loaded into a container. Per-box charges divide across it, so a lighter box costs more per tonne.