Daily Market Note — 2026-08-15

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

The read

The forward market moved and the physical market did not — or at least, not where anyone can see it. Friday’s close left the LME Turkish scrap curve firmer across every tenor, with the front month within half a dollar of $380/tonne. No deep-sea cargo has printed to confirm that the strength has transferred into cash scrap, and with Saturday bringing no price-reporting agency issue, there is no independent tape against which to test it.

That gap matters more than the direction. A rising forward curve tells you what the exchange thinks September will cost; it does not tell you what a mill paid this week. The two are routinely conflated, usually by whichever side of the table benefits.

The most useful thing on the screen today is something neither exchange advertises: there are now two independent forward curves for the same grade and destination, and they disagree by up to $5.00/tonne on the same month. Anyone quoting a forward Turkish scrap number should be asked which exchange it came from.

Key moves

• LME Turkish scrap futures (14 Aug close): front month ~$379.50/t, September $387, October $389, November $393, December $396, later tenors around $400. Futures, not physical transactions.
• CME HMS 80:20 CFR Turkey: August ~$377, September ~$382, October ~$384 — $2.50 to $5.00 below the LME at each comparable tenor.
• August-to-September LME spread: roughly $7.50/t. That is a shipment-month premium, not a change in what the material is worth today.
• Physical, last assessed: deep-sea HMS 1&2 80:20 references in the mid-$370s CFR, with the most recent transacted ex-US level around $376/t.
• Weekly scrap survey (7–13 August): steel scrap flat, copper scrap flat, aluminium scrap mostly lower, zinc scrap higher, stainless flat. Directions, not levels.

Freight and shipping

The Strait of Hormuz remains the dominant variable in delivered cost to South Asia. Following attacks on two vessels operated by a Gulf national oil company, transit volumes remain far below normal and unrestricted passage is still politically contested. A weekend without a fresh incident is best recorded as a checked absence rather than as improvement — one quiet session is not a trend.

No carrier notice has removed the congestion, emergency fuel or war-risk surcharges introduced earlier in the summer. That absence has now held across six consecutive checked sessions, which makes it one of the more reliable observations available. Vessel-tracking data continues to understate real movements as more ships operate with transponders off, so published transit counts should be treated as a floor rather than a measurement.

Supplier markets

Low water on the Rhine continues to cap barge payloads, which favours port-adjacent material in the Netherlands and Belgium over inland German tonnage — and increasingly makes availability, not price, the right question to ask a German yard. UK supply gains relative appeal for the same reason. In the US, softer domestic mill output may be loosening acquisition cost at the dock even as Turkish demand firms; whether exporters have already absorbed that is untested.

In Pakistan, the electricity-linked sales-tax mechanism applying to registered steel producers remains in force. There is still no published evidence that it lowers what mills bid for imported scrap.

Non-ferrous snapshot

LME cash references, 14 August: copper ~$14,545/t, zinc ~$3,875, aluminium ~$3,248, lead ~$1,846, nickel ~$16,575.

Reuters reported LME aluminium inventories at roughly 250,000 tonnes — the lowest since 1990. That is a genuine warrant scarcity, and it deserves to be conceded rather than argued with. It is worth separating from yard scarcity, though: the same week’s survey has aluminium scrap mostly lower. Exchange stocks and scrap availability are pointing in opposite directions.

Copper remains much the firmest leg of the complex, with a prompt premium over forward metal that has widened at every observation this fortnight. Note that the figures above are cash references; cash and three-month prices can differ by a great deal on copper right now, so any scrap formula should state which exchange, which tenor and which publication time it settles against.

Glossary

• CFR — cost and freight; price including delivery to the destination port.
• HMS 1&2 80:20 — the standard heavy melting scrap grade, 80% HMS 1 to 20% HMS 2.
• Forward curve — the strip of exchange prices for successive delivery months; its slope reflects expectations, not today’s transacted value.
• Cash vs three-month — LME prices for immediate versus forward delivery.
• Backwardation — when the immediate price sits above the forward price, usually a sign of near-term tightness.
• Warrant — a title document for metal held in an exchange-approved warehouse; warrant stocks measure exchange inventory, not total market supply.