Daily Market Note — 2026-08-27

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

The read

Nothing moved in Pakistani scrap today, and that is the most informative thing that has happened all week.

A container freight increase of roughly $400–$500 per box is publicly expected for September. On a 20-foot box that is $14 to $20 a tonne. It has been public for two sessions. Sellers are citing it. And across those two sessions the buying side has not lifted its bid by a single dollar, and the selling side has not lifted its offer by a single dollar either.

The assessment source puts it plainly: imported scrap into Pakistan has not broken upward despite supplier freight concerns.

That matters more than a price change would. A market that absorbs a cost increase passes it to the buyer. A market that refuses one leaves it with the seller. On today’s evidence, September freight is the seller’s problem.

Key moves

Imported shredded into Pakistan is unchanged, and the picture has softened slightly in structure rather than in level:

• Broad market $412–$415 a tonne CFR, described as broadly stable week on week
• Assessed shredded around $415 CFR Port Qasim
• Buyers focused at $410–$412 — unchanged for a second session
• EU and UK-origin offers at $415–$420 — unchanged for a second session
• The last published index print was $413.63 on 25 August

One point of care on the cargo everyone is quoting. The 2,000–3,000 tonne UK-origin parcel booked at $414–$415 a tonne CFR Port Qasim is being restated today — but it is the same cargo reported yesterday, not a second one. One booking is a clearing reference. Two would be a level. The market does not yet have two.

Note also that the assessment briefly resolved to a single figure yesterday — $415, up $2 on the week — and has today reverted to a range. Where a source publishes a firm number one day and a band the next, the band is the safer thing to quote.

Demand remains weak and, for a second session, measured rather than described. Pakistani mill operating rates around 35%, steel sales at 40–45% of normal, high inventories, and monsoon rain still cutting construction and steel movement. A repeated measurement is worth more than a single one: this is now a level, not a print.

Domestic prices, unchanged in local currency: scrap PKR 145,000–147,000 a tonne, billet PKR 216,000–218,000 ex-works, rebar PKR 234,000–236,000 ex-works. ⚠️ In dollars they are not unchanged — the rupee firmed to 277.33 on 26 August, its largest single-session move in weeks, so the same local prices translate to roughly $523–$530, $779–$786 and $844–$851. It is about a dollar a tonne on each leg, and it is a reminder worth carrying: an unchanged local-currency table is not an unchanged dollar table.

On Turkey, the exchange reference thinned out again. After publishing a full five-tenor curve and an intraday two-way quote yesterday, today’s reference is a single number: scrap CFR Turkey, month two, around $382.50 — down $2.50.

Set that against what actually traded. On 25 August a northern Turkish mill booked 12,000 tonnes of European HMS 80:20 at $370 a tonne CFR, and a Marmara mill booked a Baltic cargo at $369. Assessments on 26 August data run $369 to $376.

So the September future sits $12.50–$13.50 above the only two cargoes anybody booked this week. When a seller cites “the exchange at $382.50”, the reply is one line: that is September futures; European cargoes booked at $369–$370 on Tuesday.

A more interesting exchange datapoint arrived alongside it. Rebar FOB Turkey, month two, at around $589 — against physical rebar assessed at $585 and $585–$600 on 26 August data. That lands inside the physical band. On the same venue and the same tenor, the scrap contract runs rich to physical and the rebar contract does not. The exchange is not uniformly unreliable as a reference — it is unreliable on the one leg a scrap seller will quote at you.

The two together give a same-tenor spread of $206.50 a tonne between rebar and scrap, against a physical spread of $209–$216. Read small, but read correctly: the curve prices September’s Turkish mill margin slightly tighter than the mill has today. That argues against a scrap increase, not for one.

Two further destination contracts appeared: scrap CFR India, month two, around $386 — above the Turkish contract — and CFR Taiwan, month two, around $324.40. India’s advance is corroborated on the physical side, where the Indian shredded index has gained on four consecutive prints while Pakistan stood still.

Freight and shipping

The lane number is confirmed by restatement, which matters more than a new number would.

Twenty-foot freight into Pakistan is reported at $1,450–$1,500 per box, with September expected $400–$500 higher, toward $1,800–$1,850. Identical to yesterday — and a second identical observation turns a single report into a level.

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

The sequencing rule is the most useful line published today: lock September freight before locking September supplier prices. A three-to-five dollar concession from a supplier does not pay for a fifteen-to-twenty dollar increase from a carrier. Where freight is not locked, September offers belong on a freight-reconfirmable basis.

One caution on the headline rate, unchanged and still unresolved: no origin, no carrier and no service are named, and it is not stated whether the peak-season surcharge sits inside or outside it. On a European box that surcharge is a 20% difference in the answer. Ask.

And note what was dropped rather than resolved. Yesterday’s report of tighter container availability, cancelled vessel slots, and Karachi port congestion does not appear today. That is an absence, not a clearance. Anyone holding a fixed latest-shipment date should still be confirming equipment and slots in writing.

Payload remains the cheapest saving available. At an $1,850 all-in, the difference between loading 25 and 28 tonnes is $7.93 a tonne — more than the entire gap between what Pakistani buyers are bidding and what European sellers are asking. It is the only line item that improves without a carrier conceding anything. Ask for guaranteed minimum payload in writing, not typical payload.

Route and energy

Oil fell again and shipping still has not re-priced with it. Brent traded around $86.77 a barrel (−1.2%) and WTI around $81.10 (−1.4%) — roughly $7.62 below the 21 August settlement, a fall of 8.07% in under a week. Across that entire decline, no carrier has withdrawn or reduced a single surcharge, and the base container rate is reported higher.

The commentary made a distinction today that is worth borrowing: lower crude helps future bunker economics, but it does not justify reducing a current freight assumption until a carrier passes the saving through in a written quote. It is, however, a perfectly good reason to go back to a forwarder and ask. Lower oil is a negotiating lever, not a costing input.

Traffic through the Strait of Hormuz improved for a third consecutive day — 10 commodity vessels Wednesday against 8 Tuesday, versus a 10-day average of about 15. Bab el-Mandeb went the other way, 19 vessels Wednesday from 24 on Tuesday. Iran and Oman are still working on the details of a strait agreement with no final terms, and Qatar’s prime minister travelled to Iran today — the first third-party mediator to enter the process.

The genuinely important number, though, is a throughput figure rather than a vessel count. Reuters reports that oil and LNG flows through Hormuz remain at about one-quarter of pre-war levels, on ship-tracking data.

That is materially less severe than the vessel counts imply. Ten transits against a pre-conflict norm of roughly 130–140 a day is about 7%. Actual flow is about 25% — meaning the traffic still moving is skewed toward larger or fuller vessels. The counts have been overstating the disruption by roughly a factor of three.

This is not an argument for treating the corridor as normal. A quarter of normal volume is a badly impaired waterway. It is an argument for quoting throughput and direction rather than daily counts — particularly since the same series revised Tuesday’s figure from five vessels to eight overnight, the eighth such revision in sixteen sessions, and every revision so far has been upward.

Supplier markets

Europe and the Baltic are where the transacted evidence is, and it sits at $369–$370 for HMS 80:20 into Turkey. Assessments for US-origin material remain around $376 but have no cargo behind them — the US export market is described as subdued, with no cargo sales reported, as Turkey sources elsewhere.

A forward signal on the US side worth noting: 17 US steel mills are reported to be planning maintenance outages in September and October, which is expected to reduce domestic scrap appetite — a bearish input to US export pricing into the fourth quarter.

No reliable public dock quotes were available today for the US East Coast, the UK, or Canada. That gap now runs into a fourth week, and it is worth saying out loud: where dock data is absent, an approach to a supplier should be framed as a question about their market, never as an assertion about it.

Policy

A US measure covering black mass and tungsten waste and scrap took effect today — and it is not the kind of measure it has been widely described as.

The instrument is a DPAS Directive Allocation Order published in the Federal Register. Covered material must be allocated 100% to US persons and must remain physically in the United States unless the Bureau of Industry and Security grants an exception or adjustment.

That is a domestic allocation order, not an export control. The distinction is practical rather than academic. An export-control regime licenses shipments: it produces classification codes, licence applications and de-minimis thresholds. An allocation order directs where production goes. There is no licence to apply for, and a seller cannot cure it with paperwork at the port — only BIS can, by exception or adjustment.

Anyone screening US-origin material has therefore been asking the wrong question. It is not “do you hold an export licence.” It is “is your material covered, and do you hold a BIS exception or adjustment?”

The covered-item list has still not been published, so the measure is in force and not yet fully screenable. And the point worth watching is the precedent rather than the scope: an allocation order can be extended to another scrap stream without new legislation and without a rulemaking cycle.

Non-ferrous snapshot

Three-month copper around $14,336 a tonne, zinc around $3,933 and aluminium around $3,239, on 26 August official prices. Copper added about $91 and zinc about $93 over two published sessions; zinc remains near a four-year high. Anyone re-cutting a zinc-bearing formula should still be cutting it upward.

A basis caution that is easy to be caught by. A widely circulated day-delayed feed showed three-month copper around $14,253, zinc around $3,893 and aluminium around $3,225 for the same date — $83, $40 and $14 below the official prices. Neither set is wrong. They are different series: a closing or screen quote is not an official price. But on a 60/40 yellow-brass formula the gap is about $66 a tonne, and the error runs in the same direction every time — it under-values the metal.

Three metals appeared in commentary that rarely do: nickel around $16,887, lead around $1,910.50 and tin around $54,827. Treat unverified headline figures on thinly-quoted metals with more caution than the majors, not less — particularly for mixed or nickel-bearing lots, which should be valued on multiple XRF readings and a weighted recoverable-metal calculation, never off a headline.

One more general point. Today’s figures carry a tenor — “three-month” — but no price type. Cash, official, closing and three-month are four different series, and a formula that names the metal and the tenor but not the price type is not fully specified. Name the exchange, the tenor, the price type and the fixing date. No cash prices were published on any metal for a second session, so cash-to-three-month spreads are currently unobservable — pairing today’s three-month against an older cash figure would manufacture a spread nobody measured.

Glossary

• CFR — Cost & Freight; the quoted price includes ocean freight to the buyer’s port. FOB — the price at the loading port, freight excluded.
• 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.
• Month two — the second-nearest futures contract. For a late-August date that is September, not prompt material.
• Metallic spread — the gap between a finished steel price and the scrap price that feeds it; a rough proxy for a mill’s gross margin.
• 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 — the exchange’s formally published daily fix. 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 base freight.
• 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.
• XRF — X-ray fluorescence, a handheld method of reading the elemental composition of a metal lot.
• DPAS allocation order — a US instrument directing that covered production be supplied to domestic buyers. It commandeers material rather than licensing its export.