Daily Market Note — 2026-08-31

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

The read

We got this one wrong last week, and the correction is more useful than the call was.

For four sessions this note carried a reading: that imported scrap into Pakistan was declining to price in a September freight increase everyone could see coming, and that the cost would therefore land on sellers rather than buyers. It was based on the best evidence available at the time — a market report dated 25 August and a price band that had not moved in four days.

The published index tells a different story. Fastmarkets’ Pakistan shredded assessment rose $6.33 to $419.96/MT CFR Port Qasim on 28 August — its largest single gain since mid-July — with offers reported at $420–425, good-yard material at $425 and above, and deals concluded at $417–422/MT CFR.

The destination did not refuse the cost increase. It paid it.

Two things are worth taking from that. The first is about the market: the mechanism was correctly identified and the incidence was not. Fastmarkets is explicit that the cause is supply, not demand — “demand is good, while offers are rising because of collection and container shortages.” A container and collection squeeze is a logistics event priced into offers, not a demand recovery, and it can unwind faster than a demand-led rally. Before this run, the level that held for three weeks was $413–415.

The second is about method, and it generalises well beyond this trade. A price restated four times from one dated report is one observation quoted four times. That was said in this note on 29 August and it was correct — but the same discipline has to be applied to the conclusions drawn from it, not only to the number. When a source declares its own staleness, the right response is to go and find the fresher source, not to build a stronger argument on the stale one.

Key moves

• Pakistan imported scrap — the published index at $419.96/MT CFR Port Qasim (28 August), up $6.08 week-on-week. Concluded deals $417–422, offers $420–425, good-yard material $425+. The gap between standard and prime-yard material is running around $8–10/MT and is now confirmed on three separate tapes — worth establishing which tier is being quoted before comparing any two offers.
• A caution on the level itself — this is a logistics-driven move. It is not evidence of a recovery in Pakistani finished-steel demand, and it should not be extrapolated forward as though it were.
• India — shredded at $397.28, leaving Port Qasim’s premium over Nhava Sheva at about $22.68, widening from $20.88 a week earlier. Pakistan is out-bidding India for the same grade by a growing margin.
• Turkey — the exchange forward curve is published again after a gap: August $375.55 · September $384.00 · October $390.50 · November $395.00 · December $396.00. The physical index sat unchanged at $376.23 for a third consecutive session, with no new deep-sea transactions reported.
• The detail in that curve that matters — the prompt August contract is trading slightly BELOW the physical index. The forward market is not firm on the front month at all; everything above $384 on that curve is September and later. A rising forward curve is a statement about later shipment months, not about prompt cargo. Note also that this is a Friday close: 31 August is a UK public holiday and there was no exchange session.

Freight and shipping

A major carrier’s revised Far East Asia-to-Pakistan peak season surcharge takes effect today at $1,000 per 20ft and $1,500 per 40ft/45ft for most covered origins. On a twenty-foot box carrying 25–28 tonnes that is $35.71 to $40.00 per tonne — roughly two to two and a half times the size of the general September freight step being discussed across the market.

The Europe-to-Pakistan surcharge remains at $300 per 20ft and $500 per 40ft, 40HC and 45HC. The two lanes differ substantially in scale.

Anyone quoting CFR out of the Far East on a rate sheet built before this morning is quoting a stale number.

Regional risk escalated materially over the weekend. Reuters reported US forces striking Iranian launchers on Larak Island — inside the Strait of Hormuz — with Iranian retaliation against US bases in Jordan, a tanker reportedly struck by a projectile on Saturday, and weekend transit traffic through the Strait falling significantly. Brent moved above $90/bbl (around $90.31–$90.51) with WTI around $85.23–$85.57.

A note on measurement, repeated because it keeps mattering: daily vessel counts through this corridor have been revised repeatedly and always upward. Throughput and direction are the reliable measures. It is worth recording that today’s reporting gave direction without a count, which is the right way round.

The destination ports are operating normally. Karachi Port Trust’s daily tonnage page is updated for Monday 31 August, confirming continuing cargo operations on the same day as the escalation. The risk in this trade today is carrier cost, acceptance and routing — not discharge. That distinction is worth making to anyone treating the two as one thing.

Practical consequence for anyone quoting CFR this week: keep validity short — 24 hours, or the carrier’s own validity if shorter — and ask for freight quoted as separate line items: base ocean freight, peak season surcharge, war-risk, security, congestion. A single all-in number that rises after an event cannot be checked against the event.

Supplier markets

Current UK and US East Coast dock buying levels were not available from public sources today, for a sixth consecutive week. The offer side of this market remains considerably better published than the cost side, which is worth remembering when a supplier presents an increase as a market fact.

Where sellers can quote FOB or ex-works alternatives, the freight risk becomes priceable separately from the material — which is the cleanest way through a month in which the freight number is moving faster than the material number.

Container and equipment availability remains the binding supplier-side constraint for September loading. It is the same constraint Fastmarkets names as the cause of the Pakistan price move, seen from the other end.

Non-ferrous snapshot

31 August is a UK public holiday. There was no exchange session, and the last completed closing prices are Friday 28 August’s. Any figure described as “today’s” on a day like this resolves to Friday.

• Copper remains near record territory, with US tariff expectations continuing to pull refined metal toward US warehouses and tighten availability elsewhere.
• Zinc remains historically elevated with tight prompt availability, despite rising Chinese exports.
• Aluminium — no fresh public reference today.

The general point stands and is reinforced by a specific observation this week: a widely circulated copper reference dated 25 August was still being quoted on 31 August, six days later, more than $190 away from the most recent official cash price. Published figures age faster than they look, and the direction of that error is not predictable in advance. Fix against a same-day official and name four things in the contract: the metal, the tenor, the price type, and the publication. Official cash, three-month and closing prices are separate series and are not interchangeable.

Policy

The US allocation order covering black mass and tungsten waste and scrap remains in force through 27 August 2027, requiring covered material to be sold to domestic buyers absent an authorisation. The coverage test is narrower than a tariff-code lookup: hitting a covered code is necessary but not sufficient, and missing one does not automatically clear a stream.

The US Treasury has signalled additional secondary sanctions targeting Iranian financial networks. No list has been published and no entities named. A signalled package is not a designations list and should not be screened against a press report — but the value of a counterparty rescreen is highest in the window before a package lands, and banks are usually reached before vessels.

Pakistan-bound commercial imports continue to require the consignee’s NTN or FTN identifier on documentation, and it should be confirmed before final bill-of-lading instructions. A missing identifier causes manifest rejection and discharge delay. It costs nothing to check beforehand.

Glossary

• CFR — cost and freight; the seller pays ocean freight to the destination port, the buyer carries insurance and transit risk.
• Port Qasim — Pakistan’s main deep-water import terminal, near Karachi.
• Shredded — processed scrap of consistent size and density, the main containerised grade into Pakistan.
• HMS 1&2 — heavy melting scrap, the standard bulk ferrous grade.
• PSS — peak season surcharge, a temporary carrier charge added to base ocean freight.
• Contango — when forward prices sit above prompt prices; the opposite of backwardation.
• Prompt month — the nearest expiring contract on a forward curve, the closest thing an exchange has to a spot price.
• Official cash vs three-month — two distinct exchange price series; cash is for near-immediate settlement, three-month is the forward benchmark. They frequently differ by a material amount.