Daily Market Note — 2026-08-22
Market commentary on the global ferrous scrap trade. Not trading advice.
The read
Pakistan is the story today, and the interesting part is a currency claim that does not survive contact with the exchange rate.
Trade reporting this morning described Pakistani finished-steel prices as falling “amid PKR appreciation.” The rupee has not appreciated. It closed 21 August at 277.79 per US dollar, up from 277.57 — and a rising number means more rupees per dollar, which is the rupee getting weaker, not stronger. Across the week the move runs 277.30 to 277.79, a depreciation of about 0.18%.
That matters less as a correction than as an inversion. A weaker rupee makes dollar-denominated imported scrap more expensive in local money, not less — so a Pakistani mill this week faced a dearer input and a cheaper output at once, squeezed from both ends rather than cushioned on one.
The honest footnote is that none of it is large: the rupee’s entire six-week range is 276.74 to 278.13, about half of one percent. The currency is not the variable here. The margin is.
Key moves
Imported scrap held while finished steel fell. Flat input against softer output compresses the melting margin, and a mill with a compressed margin has less room to chase imported material regardless of what it is holding. It stacks with a fact already on the record: Pakistan imported 408,041 tonnes of ferrous scrap in July, up 24.6% on the month and 42.6% on the year. A buyer that has just taken record delivery is not a buyer in a hurry.
A forward curve appeared for a destination that rarely has one, and its shape is the opposite of Turkey’s. The exchange strip for steel scrap delivered to India now shows August at $380.85 a tonne and September onward at roughly $381 — essentially flat from one month to the next, and around $4 below the most recent physical shredded assessment for the same destination.
Compare Turkey, where the exchange strip last week ran $376.50 for August against $382 for September — a $5.50 step up. Two destinations, two exchange curves, opposite shapes in the same week.
Two cautions go with that Indian number. It is not an HMS figure — India’s HMS assessment sits near $342.50, so the futures price is nearly $40 higher and reflects a shredded basis. And a forward price sitting below today’s physical price is not a market predicting a rise. “The forward market says next month is dearer” is a statement about Turkey, and only about Turkey.
The physical tape itself did not move. Saturday brings no publisher assessments, and the last observed Turkish prints — $373.25 for the general 80:20 grade, $373.00 for Baltic-origin material — were unchanged going into the weekend.
Freight and shipping
The best Hormuz measurement of this episode arrived today, and it is not a vessel count. Oil flows through the strait are running at roughly 8 million barrels a day against more than 20 million before the conflict — about 40% of normal.
That is worth more than the daily transit tallies, which have been unreliable throughout: today’s report gives seven vessels crossing on Friday, “half the previous day’s level” — implying fourteen on Thursday, where yesterday’s reporting gave seven for that same Thursday. The counts contradict each other; the throughput figure does not.
Iran has allowed Iraqi tankers to transit following diplomatic contact. This is the first easing signal of the episode and it is narrower than it looks: a bilateral accommodation for one flag, with broad commercial normalisation explicitly not established. Access has become discretionary and politically allocated — a different risk from closure, not a smaller one.
Oil paused. Brent is around $93.30, down about $0.31, ending a six-session run of gains but still well above the $90 level that has kept freight quotations short-dated.
The dated item ahead is new US sanctions on Iran expected Monday 24 August — reaching banks, insurers and counterparty screening as much as ships, a point easily missed when the whole subject is filed under “freight.” Nothing was withdrawn from the Pakistan-bound surcharge stack this week, and for once nothing was added either; a peak-season surcharge from Far East Asian origins attaches on 31 August at $1,000 per twenty-foot and $1,500 per forty-foot container.
Supplier markets
US scrap sentiment continues to be reported as soft, with no fresh dock-level numbers into the weekend; European material still clears below American on the last observed bookings.
Nothing new has been published on Rhine water levels for six days — the recycled description of conditions as “improved only slightly” traces back to a report dated 19 August. The inland European cost picture is currently an assumption rather than an observation.
Non-ferrous snapshot
Official settlements for 21 August: copper cash $14,291 against $14,235 three-month; zinc $3,980 and $3,824; aluminium $3,227 and $3,244.
Zinc was the story for a second consecutive session. Cash rose $114.50 — about $230 across two sessions — with the premium for immediate metal widening to $156, the widest in this record. When outright price and prompt premium make highs together, that is the signature of genuine near-term scarcity rather than a general rally.
Copper did the opposite, and the contrast is instructive. The metal rose — cash up $121, three-month up $264.50 — while the premium for prompt delivery collapsed from $199.50 to $56, having been $290 two sessions earlier. The price went up and the urgency went down.
That divergence is the practical argument for pricing each metal in a mixed parcel against its own same-day reference: a single rule drawn from copper would have been wrong on zinc this week, and vice versa.
Aluminium’s curve swung back — the discount for immediate metal, compressed to $1 on 20 August, reopened to $17. A spread travelling from $20.50 to $1 to $17 across three sessions says little about physical tightness and a good deal about how volatile the front of that curve is.
On policy: US export restrictions on black mass and tungsten-containing scrap begin 27 August, now five days away, with no published rule text, covered-item list or tariff codes in circulation. This is not a general US scrap export ban — a distinction worth holding onto as the date approaches. Stricter EU rules for non-OECD destinations not on the authorised list apply from 21 May 2027.
Glossary
- CFR — Cost & Freight; the quoted price includes ocean freight to the buyer’s port.
- HMS 80:20 — Heavy Melting Scrap, a mix of grades 1 and 2 in that ratio.
- Shredded — processed, size-reduced scrap; a cleaner and dearer grade than HMS.
- Forward curve — the set of prices for delivery in successive future months. Rising with time is contango; falling is backwardation.
- Cash vs three-month — metal for immediate versus three-month delivery on the exchange.
- Appreciation vs depreciation — a currency quoted as units per dollar is getting weaker when that number rises.
- Peak season surcharge — a temporary per-container charge added by a carrier on top of the base freight rate.