Daily Market Note — 1 August 2026

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

The read

Shipping risk moved back to the centre of the scrap trade this weekend, and for the first time in a week it did so with dated evidence behind it rather than general unease.

On 31 July, Iran said it had stopped two vessels and turned back four others in the Strait of Hormuz. Oil rose more than 1%. Traffic through the strait — which carries roughly a fifth of global oil flows — remains thin. Separately, an LNG tanker bound for Pakistan cleared Hormuz via an Iran-approved route, the first such transit in nearly three weeks.

Read that pair carefully, because they say different things. Cargo is still moving. But it is moving selectively, by permission, through a corridor that is not operating normally. For anyone pricing delivered cargo into South Asia, the relevant exposure is less the strait itself than what a thin and permissioned Gulf corridor does to bunker costs, war-risk insurance and vessel routing across the wider network.

Everything else this session was quiet, restated, or unverifiable.

Key moves

• Turkey scrap futures: the forward curve is best treated as unobserved since 30 July. The most recent widely circulated reference set — July $373, August $378, September $384.50, October $390, November $396, December $400 — matches a close from several sessions earlier to the cent, and sits meaningfully below the last curve independently confirmed. Anyone being told “the forward curve is firm” this weekend should ask which close, and when.
• The physical market has not moved at all. Published physical assessments have now been frozen for four consecutive sessions, with the leading US-origin index unchanged and one major range assessment holding the same band for six consecutive issues — the longest unchanged stretch in the current dataset. No publisher issued on Saturday, so nothing new was available to test it.
• South Asia: no dependable public mill bid sheet for shredded, HMS or PNS for a sixth consecutive session, and no public evidence of a broad increase in mill bids.
• Pakistan’s official June trade data remains the most solid demand datapoint available: 323,896 tonnes of steel scrap imported, up 24.2% month-on-month and 64.9% year-on-year, worth about $199.34 million. It cuts both ways, and honest readings differ — it confirms strong buying earlier in the season, but heavy June arrivals can also mean mills are now well-stocked and under less pressure to book.
• Import duties: a 4% regulatory duty is now confirmed on a second Pakistani tariff line — compressor scrap under HS 72044940 — alongside tinned iron or steel scrap under HS 72043000. Two lines is not a rule. Other ferrous grades carry separate tariff entries and may be treated differently; a single blanket duty assumption across grades is the error to avoid.

Freight and shipping

Beyond Hormuz, the Red Sea picture improved slightly. Bab el-Mandeb traffic has recovered from recent lows, and Houthi authorities publicly denied plans to impose mandatory transit fees on shipping. That is genuine easing in volume terms — but the safe-transit arrangement remains voluntary and politically reversible, so it is not the same as easing in risk terms.

The two waterways are therefore moving in opposite directions this week, which matters because a book routed through the Gulf and a book routed through the Red Sea are not exposed to the same change.

No reliable public inbound freight rate to Pakistan from the UK, Europe, Canada or the US was available for a sixth consecutive session. One useful conversion for anyone assessing a surcharge: a $500 per-container charge works out at roughly $18.50–$20 per tonne at typical loaded weights of 25–27 tonnes. Charges of that size can consume an entire trading margin without the scrap price moving at all — which is why lower container weights quietly cost more per tonne than most cargo planning assumes.

Supplier markets

European sellers continue to point at the forward curve to justify firm expectations for later shipment. The counter-question is a fair one in any market: which physical booking, dock-price movement or freight increase is behind the request?

On policy, two developments are worth tracking. In the EU, the revised Waste Shipment Regulation — in force since 20 May 2024 — restricts non-hazardous waste exports to non-OECD destinations from 21 May 2027, and the first approved-country list is due by 21 November 2026. That November date is a publication milestone rather than an application deadline, which matters: whether a given destination qualifies is not something an individual exporter can influence. UK suppliers sit outside the EU regulation, though UK waste-shipment rules still apply.

In the US, an order signed on 30 July authorises restrictions on exports of certain e-waste and used batteries rich in critical minerals such as lithium and tungsten. Implementing rules have not been issued, and this is not a general scrap export ban — ordinary ferrous and copper cable are outside the stated scope. It does, however, signal tightening policy around strategic scrap streams.

Non-ferrous snapshot

Copper remains the strongest market in the complex, and extended its gains: $13,800/t on the LME, a second consecutive rise and a fresh high, after a sharp jump the previous session. The structural backdrop is well documented — CME warehouses now hold 58% of visible global copper stocks on unresolved US tariff policy, Shanghai stocks have fallen to 69,610 t from 433,458 t in March, and the Yangshan import premium sits at $115/t against $59/t in June.

Zinc also firmed, to $3,631/t, its second consecutive gain — notable because China’s net refined zinc imports fell 79% year-on-year to 38,000 t in the first half as domestic smelting capacity expanded. The import channel and the price are pointing in different directions right now.

Aluminium was the only major to ease, at $3,179/t. China’s semi-finished exports rose 15% in H1 and Indonesian primary exports increased sharply, offsetting Gulf production losses — which is why futures have given back the conflict premium even though physical premiums remain firmer than the futures market suggests.

Lead is the one to watch. China imported 147,000 t of refined lead in H1 2026 against just 17,000 t a year earlier, with reporting attributing the surge partly to a shortage of scrap feed for secondary production. That is a scrap-specific signal: it suggests secondary producers cannot source units, a condition that tends to firm lead-bearing scrap ahead of the refined price.

Glossary

• CFR — cost and freight: the seller covers the cargo and the ocean freight to the destination port, but not insurance or import duties.
• HMS 1&2 (80:20) — Heavy Melting Scrap, the standard obsolete-steel grade, in a mix of 80% grade 1 to 20% grade 2. The world’s most-traded scrap benchmark.
• Shredded — scrap processed through a shredder to a consistent size and density; cleaner and more expensive than HMS.
• PNS — Plate and Structural scrap: heavy, clean, low-residual material from plate and beams.
• Forward curve — exchange-traded prices for delivery in future months. It shows what sellers and buyers expect, not what physical cargo has actually traded at.
• Backwardation — when the price for immediate delivery exceeds the price for later delivery, usually a sign of genuine near-term shortage.
• Yangshan premium — the extra amount Chinese buyers pay over the exchange price for imported copper delivered into bonded warehouses; a direct read on Chinese import appetite.
• War-risk / emergency surcharge — additional charges a carrier can add for hazardous routings or sudden cost shocks, sometimes after a booking is made.
• HS code — the international tariff classification number that determines what duty a cargo pays on import.