Daily Market Note — 2026-08-26

Market commentary on the global ferrous scrap trade. Not trading advice.

The read

The scrap market moved a couple of dollars this week. The cost of shipping it is being quoted four to seven times that. When those two facts sit in the same sentence, the second one is the trade.

Imported shredded scrap into Pakistan has a clearer picture today than at any point this month, and it is a firmer one. But the number that should hold a trader’s attention is not the scrap price — it is the container.

Key moves

A cargo actually printed. A 2,000–3,000 tonne UK-origin shredded parcel was booked at $414–$415 a tonne CFR Port Qasim. Most of what gets reported in this market is an assessment, an indication, or a level someone was “heard” to be at. This is a booking with an origin, a grade and a size attached — the strongest recent physical reference for the destination.

Around it, the market decomposes cleanly for the first time in a week:

• Buyers focused at $410–$412 a tonne CFR
• EU and UK-origin offers at $415–$420
• The assessed level at around $415, up $2 a tonne week on week — after six sessions of a flat $412–$415 band
• The last published index print was $413.88 on 21 August, still consistent with all of it

That is a $3–$10 spread, and the deal cleared in the upper half of it. The practical consequence is narrow: $420 is an ask, not a market value. It sits $5–$6 above the only confirmed booking anyone can point to.

The demand side is weak, and for the first time it is measured rather than described. Pakistani mill operating rates are reported around 35%, with steel sales at only 40–45% of normal levels. Inventories are high, heavy monsoon rain is still cutting construction and steel movement, and mills are buying mainly against immediate requirements — on top of a record import month already on the record, 408,041 tonnes in July, up 24.6% on June and 42.6% year on year.

A mill running at 35% does not need tonnes. It is the reason a firmer price can be true and a strong market can not be.

Domestic prices, for context: local scrap around PKR 145,000–147,000 a tonne, billet PKR 216,000–218,000 ex-works and rebar PKR 234,000–236,000 ex-works — roughly $522–$529, $777–$785 and $842–$849 at current exchange rates.

On Turkey, the exchange reference came back — and it settles an argument. After two sessions publishing no price at all, the full curve returned: August $377.50, September $385.00, October $389.00, November $390.50, December $394.00. Against the last full curve five days ago the changes are +$0.50, −$0.50, +$1.00, −$1.00, −$0.50 — mixed in sign and, taken together, nothing. Two blank sessions concealed a flat market, not a move.

The genuinely new information is the intraday quote that came with it: August bid $374.00 / offered $376.50; September bid $386.00 / offered $388.00. That front-month bid sits below the most recent US-origin physical assessment of $375.21, and within a dollar or so of the whole physical tape — general 80:20 grade at $373.00, Baltic-origin at $372.50, from 21 August data. So when a seller cites “the exchange at $385”, the answer is one line: that is September. August is bid $374.

Freight and shipping

This is the section that matters this week.

Twenty-foot container freight into Pakistan is reported around $1,450–$1,500 per box. Market participants expect September to rise by roughly $400–$500 per container, potentially taking rates toward $1,800–$1,850.

20ft container	Per box	At 28 tonnes	At 25 tonnes
Current	$1,450–$1,500	$51.79–$53.57/t	$58.00–$60.00/t
September (expected)	$1,800–$1,850	$64.29–$66.07/t	$72.00–$74.00/t
Increase	$400–$500	$14.29/t	$20.00/t

Set that against the scrap market above. The entire gap between what buyers are bidding and what sellers are offering is $3–$10 a tonne. The expected freight increase is $14.29–$20.00 a tonne — between 1.4 and 6.7 times the whole negotiation.

A desk that wins five dollars from a supplier and loses twenty to a carrier has gone backwards. Written September freight belongs in hand before any September-loading price is agreed — and it is worth asking whether the reported increase applies to that specific port, carrier and service rather than assuming it is general.

Three further conditions, all reported as deteriorating:

• Container availability is tighter.
• Some shipping lines have reportedly cancelled previously booked slots. For anyone holding a fixed latest-shipment date, that is a contractual exposure, not an inconvenience.
• Karachi port congestion and inland transport disruption are complicating deliveries. Note where that lands: it is after discharge, so it shows up in free days, detention and demurrage — not in the ocean rate, and therefore not in any quote currently on a desk.

Nothing has come off the surcharge stack. A peak-season surcharge from European origins remains active at $300 per 20-foot and $500 per 40-foot, 40HC and 45HC. The Far East Asia surcharge takes effect on 31 August at $1,000 per 20-foot and $1,500 per 40-foot or 45-foot — unchanged on price, though which origins it covers is still not published as a list.

One arithmetic point that gets better as rates get worse: at an $1,850 all-in, the difference between loading 25 and 28 tonnes into the box is $7.93 a tonne — more than the entire buyer-seller spread in the scrap market. Payload is a price. Ask for guaranteed minimum payload in writing, not typical payload.

Route and energy

Oil fell again and shipping conditions did not improve with it.

Brent traded around $87.87 a barrel and WTI around $81.88, as markets priced a greater chance of a partial reopening of the Strait of Hormuz. That is roughly $6.50 below where crude settled on 21 August, a fall of nearly 7% in a week.

Traffic through the strait improved modestly — five commodity vessels on Tuesday against four on Monday, but a 10-day average of 15 — and Iran and Oman have resumed talks on a temporary shipping corridor and mine removal, with no final agreement as of 26 August. Mine clearance is worth noting: unlike a corridor announcement, it is an operation with a duration attached.

And here is the point. Across that entire fall in crude, not one carrier has withdrawn or reduced a single surcharge, and the base container rate is now reported higher. Freight did not follow oil down — insurance, route acceptance, equipment positioning and war-risk treatment do not re-price because a barrel does. A reopening headline is not an operational normalisation. Premiums come off on a carrier’s written notice, not on a wire story.

One caution on the vessel numbers themselves, and it is a repeat with new evidence. Monday’s transit count was reported as two yesterday and as four today, by the same series. Meanwhile the 10-day average has been quoted at 11 last week and 15 this week, over a period in which every daily figure published sat between 2 and 16 — figures that average closer to 9. That pattern points to substantial upward revisions in the underlying data. These counts are useful for direction and unreliable as records. Anyone quoting one to a counterparty should expect to be corrected.

Non-ferrous snapshot

Copper three-month around $14,306 a tonne, aluminium three-month around $3,233.50, and three-month zinc around $3,932 in official open-outcry trading. Copper remains near record territory; zinc is near a four-year high.

On zinc, against the last published official settlement of $3,840 for three-month metal, today’s figure is up around $92. Zinc has been the strongest leg of the complex for two weeks and it has extended again. Anyone re-cutting a zinc-bearing formula should be cutting it upward.

More generally, today’s figures each carry a tenor and a price type — “three-month”, “official open-outcry”. That is how a metal reference should be quoted and it is not how most of them are. Cash, official, closing and three-month are four different series, and the gap between a correctly dated official price and a stale one, on the same metal and the same nominal date, ran into the hundreds of dollars a tonne earlier this week.

A related trap is live right now: no cash figures were published today on any of the three metals, so the cash-to-three-month relationship — the thing that tells you whether prompt metal is tight — is genuinely unobservable. Pairing today’s three-month against a two-day-old cash price would manufacture a spread nobody measured. Price a parcel on one tenor, sourced on one date, and name both in the contract.

Glossary

• CFR — Cost & Freight; the quoted price includes ocean freight to the buyer’s port.
• HMS 80:20 — Heavy Melting Scrap, a mix of grades 1 and 2 in that ratio. Shredded is processed, size-reduced scrap: cleaner and dearer.
• Billet — semi-finished steel, cast from melted scrap and later rolled into products such as rebar.
• Bid and offer — what a buyer will pay and what a seller is asking. The gap is the spread; a deal prints somewhere inside it.
• Cash vs three-month — metal for immediate versus three-month delivery on the exchange. Cash dearer is backwardation; three-month dearer is contango.
• Official price / open outcry — the exchange’s formally published daily fix, derived from floor ring trading. Distinct from the closing price and from electronic-screen quotes.
• Peak season surcharge — a temporary per-container charge added by a carrier on top of the base freight rate.
• Payload — the tonnage actually loaded into a container. Per-container charges divided by a smaller payload produce a higher cost per tonne.
• Free days, detention and demurrage — the days a container may sit before charges begin, and the charges that follow. Landside congestion is paid for here, not in the freight rate.
• Latest shipment date — the contractual deadline by which cargo must be loaded. A cancelled vessel slot against a fixed date is a contractual problem, not a scheduling one.