Daily Market Note — 2026-08-12
Market commentary on the global ferrous scrap trade. Not trading advice.
The read
Wednesday was a bad day for shipping and a quiet one for prices, and the gap between those two facts is the story. Three separate maritime corridors carried an adverse event in the same session — the first time in this episode that has happened — while the Turkish scrap index drifted slightly lower and the exchange contract did not move at all.
Markets that have lived with a risk for two months stop reacting to it daily. That is normal, and it is not the same as the risk going away.
Key moves
Turkey eased back and the exchange stood still. The US-origin assessment fell $0.82 to $377.11 a tonne CFR, giving back roughly a quarter of the sharp move it made at the start of the week. The general all-origin assessment was unchanged at $373.25, and no fresh booking was reported above the $375.50 that transacted on Monday. On the exchange, the August contract settled at $376.50 for a second consecutive session — flat, after having resolved upward through the previous week’s offer.
Two sessions flat is itself information. The contract stopped rather than extended, and the assessed price is converging back toward the level at which cargoes actually cleared — the same pattern that played out in early August.
A word of caution on monthly figures. A widely circulated summary this week put Turkish HMS 1&2 80:20 down about $10 a tonne to $370 CFR across July. Neither half of that squares with the daily assessment record: the general assessment ran $381.50 at the end of June to $374.00 at the end of July — a fall of $7.50 — and the US-origin index moved barely $1.40 over the same month. July finished at $374, not $370, and the market today is higher again. A month-average retrospective is not a current price, and it is worth checking one before it gets quoted as though it were.
Pakistan produced nothing for a second session. No published bid, no fresh import figure, no domestic rebar print. The most recent picture remains an import shredded reference around $410–415 CFR with a transaction confirmed toward the upper end, and June scrap imports of 323,896 tonnes — now roughly six weeks old and restated unchanged for a third consecutive session. A number repeated three times starts to read as current. It is not.
Freight and shipping
This is where the day’s news was, and it was serious.
In the Bab el-Mandeb, a Houthi attack on the Egyptian-owned Tihamah killed four crew members and two rescuers. Separately, in the Gulf of Oman, US forces struck the Panama-flagged Vela Nova, which they alleged had violated the blockade on Iran. Traffic through the Strait of Hormuz remained far below normal.
The Gulf of Oman incident is the one most likely to be under-weighted, and it is worth separating out why. Almost every freight assumption in this trade has been built around a single chokepoint. The Gulf of Oman is the approach water — a vessel can now encounter trouble before it reaches the strait at all. And the nature of the risk has shifted: a blockade enforced by naval action against a commercial hull is a compliance exposure attaching to a cargo’s origin, ownership and documentation, not only a routing exposure that can be insured or sailed around.
A note on the transit numbers, because they deserve care. Wednesday’s reporting put Hormuz traffic at eight vessels on Tuesday, described as a one-week low — one day after a widely cited figure of six vessels on Monday. Eight cannot be a one-week low if six printed the day before. Something in that series is inconsistent, and the honest description is a corridor that is impaired and volatile — roughly six to eleven transits a day against a pre-war norm of around 130 to 140 — rather than a precisely measured trend. Single-day vessel counts are being quoted with more confidence than they can carry.
On the carrier side, nothing was withdrawn. Published measures still in force on relevant trades include MSC’s $500 per container Northern Europe congestion surcharge, CMA CGM’s emergency fuel surcharge, and Hapag-Lloyd feeder and contingency charges. CMA CGM’s Pakistan schedule again confirms active Port Qasim service — which is worth noting precisely because it happened on the same day a crew was killed and a hull was struck. Vessels are still calling and the risk went up. Those are independent facts, and they get conflated constantly.
One forward date remains live: a North Europe inland fuel component scheduled to expire on 14 August. Inland relief is not ocean relief.
Supplier markets
Low water on the Rhine is now an availability question, not a freight one. Water levels remain at record lows with affected barges still loading at roughly 20–30% of normal capacity — unchanged into a second week. That distinction matters: a one-week squeeze raises the cost of moving material, while an unchanged one starts to determine whether the material moves at all. One German collector has suggested mills and export yards may face reduced allocations into late September.
The practical consequence is that inland German material can be expensive even where the posted yard price has softened, while port-adjacent Benelux supply carries no barge leg. The right question to a German supplier this month is not what the price is — it is what tonnage can actually be loaded and delivered in September, and by what transport mode.
There is still a genuine tension in the reporting. European steel and aluminium scrap prices continue to be described as soft on weak demand despite the freight squeeze — but that assessment is now four days old, while export FOB assessments at Rotterdam and in the UK both rose earlier in the week. Domestic prices set by mill demand and export prices set by constrained inflow are not the same market.
No verified live dock buying sheets were published for the UK, the US East Coast, Germany, the Benelux or the Baltics — a sixth consecutive session.
Regionally, Bangladesh weakened across the board. Imported shredded fell about $5 a tonne, imported scrap about $4, and ship-recycler offers for vessels dropped roughly $10–15 per light displacement tonne, with reports that some importers are struggling to open letters of credit. Local prices moved the other way — steel plate up $4, local scrap up $2 — which is the signature of an import-financing constraint rather than weak underlying demand.
India’s ship-recycling market, by contrast, continues to improve. Read together, those two are less contradictory than they look: material and vessels reallocating between yards that compete within a couple of dollars per LDT of each other. Demolition supply competes most directly with heavy, plate and re-rollable grades, and barely at all with shredded. Indian domestic sponge iron remains a cap on imported scrap appetite there.
Non-ferrous snapshot
LME: copper $14,217/t (+$65), aluminium $3,374/t (+$53.50), zinc $3,741/t (+$20).
Aluminium set a second consecutive record for this run, with a new largest single-session gain — beating the record it set only the previous day. It is up 5.0% since 4 August, against copper’s 2.5% and zinc’s 1.7%. Most commentary still ranks aluminium below copper on tightness. The tape has disagreed for a fortnight now, and the gap is widening rather than closing.
Zinc produced the most useful data point of the day, and it is not a price — it is a pair. Cash zinc was reported around $3,822 against a three-month price of $3,741 on 11 August, and around $3,785.50 against $3,728.50 on 12 August. That is a backwardation of $81 a tonne narrowing to $57 in a single session, with warehouse stocks near 97,000 tonnes.
Why that matters beyond zinc itself: metal for immediate delivery is trading above metal for later delivery, but by less than it was. The outright price rose while the curve softened. A seller arguing that zinc is strengthening is right about the headline and wrong about prompt tightness, and those two things are being read as one.
It is also a reminder that carries well beyond this week. A metal price quoted without its tenor is incomplete — cash and three-month can differ by real money, in this case $57 to $81 a tonne. The same applies to venue: copper is quoted in dollars per tonne in London and dollars per pound in the US, and the two are not currently at the same level. On any contract priced off an exchange reference, name the exchange, the tenor and the publication time. The difference is not academic.
Glossary
- CFR — Cost and Freight: the seller covers goods and shipping to the destination port.
- FOB — Free On Board: price at the loading port, before ocean freight.
- HMS 1&2 80:20 — Heavy Melting Scrap, a standard blend of 80% HMS 1 to 20% HMS 2.
- Index vs cargo — an assessed price reflecting judged market level, versus a reported completed transaction.
- Cash vs three-month — exchange prices for immediate versus deferred delivery; the gap between them is a tightness signal.
- Backwardation — when metal for immediate delivery costs more than metal for later delivery, usually a sign of prompt tightness.
- Kaub gauge — the shallowest reference point on the Rhine, used to judge barge loading limits.
- LDT — Light Displacement Tonnage, the basis on which ships are sold for recycling.
- Sponge iron / DRI — Direct Reduced Iron, a domestically produced substitute for imported scrap in electric furnaces.