Daily Market Note — 2026-09-07

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

The read

Pakistan’s shredded structure held through the weekend, but the more consequential move is a further deterioration in Gulf shipping conditions.

The three-tier Port Qasim shredded structure — buyer bids around $410–412/MT CFR, reported deals $413–417, standard seller offers $420–422, premium-yard material $425 and above, premium UAE-origin near $430 — repeated essentially unchanged. The most recent detailed public assessment still stands at $417/MT CFR Port Qasim. Fresh half-year statistics released this week show Pakistan’s ferrous scrap imports up 11% year-on-year to 1.67 million tonnes in the first half of 2026, even as domestic crude steel output fell 26% over the same period — a market importing more while producing less, consistent with mills reported running at 30–50% of installed capacity. First-half finished-steel imports also rose, up roughly 31% year-on-year.

The bigger development sits offshore. Reported commodity-vessel traffic through the Strait of Hormuz fell to a 10-day average of 10 vessels per day, the lowest level since May, with Saturday traffic down to just two vessels and no very large crude carrier reported to have exited the strait since midweek. Brent crude traded near $97.50/bbl. None of this has yet produced a fresh Pakistan price print, but it is exactly the kind of backdrop that keeps freight, insurance and routing costs elevated even while the underlying scrap benchmark holds still.

Key moves

• Pakistan imported shredded — structure unchanged: assessment $417/MT CFR Port Qasim, reported deals $413–417, standard offers $420–422, buyer bids $410–412, premium-yard $425+, premium UAE-origin ~$430.
• UK-origin HMS 80:20 offered $390–395/MT CFR Port Qasim, and Middle East-origin sheared HMS booked $405–410/MT CFR — both holding at levels first reported several sessions ago.
• Turkey’s forward curve extended: exchange contracts for steel scrap CFR Turkey closed at $388.50/MT for September, $395.50 for October, $400.50 for November, $402 for December. The physical Turkish HMS tape sits around $382/MT CFR, putting the front-month futures premium at roughly $6–6.50 over physical — a reminder that a forward curve reflects supplier expectations, not a confirmed prompt cargo.
• India’s imported container HMS 80:20 was assessed around $365/MT CFR Nhava Sheva, up modestly from the prior reading — India remains a competing destination for the same European-origin material Pakistan buys, though the two markets differ enough in freight, specification and terms that the price gap is not a direct comparison.
• Half-year statistics, newly published this week: Pakistan scrap imports +11% y/y to 1.67 million tonnes (H1 2026) against crude steel output −26% y/y to 1.39 million tonnes; installed steelmaking capacity of roughly 9 million tonnes/year against actual output near 3.8 million tonnes/year; UAE-origin scrap exports to Pakistan down 22% y/y over the same period.

Freight and shipping

Gulf shipping risk is the session’s central freight development.

• Strait of Hormuz: the 10-day average commodity-vessel count fell to 10 per day — the lowest since May — with Saturday traffic down to two vessels and Sunday seeing four laden vessels enter. A tanker attempting to exit the strait was reportedly turned back, and no very large crude carrier has exited since midweek. Iran has signalled plans to announce a new restricted zone and revised shipping routes; separately, Iran and Oman have reportedly agreed maps for a proposed shipping corridor, though final approval was not confirmed. Brent traded near $97.50/bbl, WTI near $92.60/bbl.
• Destination operations remain unaffected: Port Qasim’s daily programme continued to show normal container operations with no sailing, berthing or shifting cancellations reported — a useful reminder that route risk and destination-port risk are separate things and should be priced separately.
• Carrier surcharges, unchanged and in force: Europe → Pakistan peak season surcharge remains $300 per 20ft, $500 per 40ft/40HC/45HC. Far East Asia → Pakistan remains $1,000 per 20ft, $1,500 per 40ft/45ft, rising to $2,000 per 40ft/45ft from 15 September (South Korea from 18 September) — not applicable to spot bookings, and no revised 20ft figure has been published. Middle East → Pakistan emergency contingency surcharges rose from 1 September to $2,050 per 20ft and $3,500 per 40ft/40HC/45HC, up from $1,800 and $3,000 respectively.

Supplier markets

UK-origin scrap was again reported offered around GBP 255–260/MT ex-works, unchanged over several sessions. Container equipment and slot availability remain the binding near-term supplier-side constraint and continue to go unreported by any public source.

A temporary UAE ferrous scrap export restriction remains scheduled through 8 October, with exemptions possible through government approval — a factor in the reported 22% year-on-year decline in UAE-origin exports to Pakistan noted above.

On the regulatory front: the European Commission is reportedly preparing a proposal for a broader restriction on waste exports — including aluminium scrap — to non-OECD countries. The proposal remains subject to public consultation and adoption procedures and is not yet final law; Pakistan, as a non-OECD destination, would be directly affected if adopted in the reported form.

Non-ferrous snapshot

Reported LME levels (public trading summaries), where a complete reading was available:

• Zinc — cash around $4,085–4,087/t, three-month around $3,928–3,930/t. The roughly $157/t cash premium over three-month continues to signal tight nearby supply.
• Nickel — cash around $16,680–16,690/t, three-month around $16,840–16,845/t.
• Copper and aluminium — no complete public trading summary was available at the time of writing.

Glossary

• CFR — cost and freight; the seller pays ocean freight to the destination port, the buyer carries insurance and transit risk.
• EXW — ex works; the buyer arranges and pays for onward transport, so freight is priced separately from the material.
• 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 80:20 — heavy melting scrap in a standard 80:20 grade mix, the benchmark bulk ferrous grade.
• Sheared HMS — heavy melting scrap cut to size, typically denser and easier to charge than unprepared material.
• PSS / ECS — peak season surcharge / emergency contingency surcharge, temporary carrier charges added to base ocean freight, quoted per container.
• Cash vs three-month — two points on the same exchange price curve; cash settles near-immediately, three-month is the standard forward benchmark. When cash trades above three-month (“backwardation”), it typically signals tight near-term supply.