Daily Market Note — 2026-08-23
Market commentary on the global ferrous scrap trade. Not trading advice.
The read
A correction first, because yesterday’s note carried the wrong number. This note reported Brent crude at “around $93.30, down about $0.31, ending a six-session run of gains.” Friday’s settlement was $94.39 a barrel, with WTI at $87.06. The pullback did not happen. Friday was a seventh consecutive session of gains and a new high for this episode.
That matters beyond the arithmetic. Freight quotations across this corridor have been kept short-dated all month against a $95 escalation level — and on the corrected figure that level is 61 cents away, the closest it has been at any point in the conflict.
One further detail is worth more than the headline: Brent rose while the gap to WTI widened again, to $7.33 from $7.14. A widening spread between the two puts the risk premium on seaborne Atlantic crude rather than on landlocked American barrels — and seaborne crude is the leg that prices marine fuel. That is the second independent instrument this week pointing at the same transmission channel into freight.
Key moves
The exchange curve for steel scrap delivered to Turkey turned up on Friday, and its shape is the interesting part.
The strip now runs August $377.00, September $385.50, October $388.00, November $391.50, December $394.50 a tonne — higher on every month than Thursday’s close, with the August-to-December step widening to $17.50 from $15.00.
But the front month rose 50 cents while the deferred months rose $3.00 to $3.50. The market marked up the forward, not the prompt. “The forward curve is firmer” is a September statement, not an August one — and a forward-led rise is an argument about shipment-month premiums, not about what prompt cargo is worth today. The strip also remains $1.00 to $2.50 below where it closed a week ago on every month. Firmer than Thursday; softer than last week.
Pakistan held for a third session. Imported ferrous scrap is reported at $412–$415 a tonne CFR, broadly stable week on week, while Pakistani finished-steel prices are described as weaker for a second session. Flat input against softer output compresses the melting margin — and it stacks on 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.
Worth noting that the reporting itself now carries the caveat: the $412–$415 range is described as market context rather than an executable bid. The published shredded assessment for the same destination has not refreshed since 18 August.
Freight and shipping
Strait of Hormuz shipping remains severely impaired. Reported transits: seven commodity vessels on Thursday, against fourteen the previous day. These daily counts have been unreliable throughout — yesterday’s reporting attached the same pair of numbers to Friday and Thursday, one day later than today’s. The counts keep disagreeing with each other; treat the direction, not the tally. The better measure — oil flows at roughly 40% of pre-conflict levels — was not updated today and dates from 22 August.
Iran formally rejected the expected US sanctions on Saturday, one day before the package is due on Monday 24 August. A public refusal issued the day before an announcement makes a softening carve-out less likely, not more. The package reaches banks, insurers and counterparty screening as much as ships — a point easily missed when the subject is filed under “freight.”
Nothing was withdrawn from the Pakistan-bound surcharge stack this week, and nothing added. A peak-season surcharge from Far East Asian origins attaches on 31 August — now described as “revised,” with no statement of what changed.
Supplier markets
US scrap sentiment continues to be reported as soft, with no fresh dock-level numbers. Canadian domestic prices are again described as weaker through August in parts of Ontario and Quebec — a restatement now traceable to data eight days old.
Nothing new on Rhine water levels for seven days. The inland European cost picture remains an assumption rather than an observation.
Non-ferrous snapshot
No exchange session Sunday; Friday remains the reference. 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 still carries a $156 premium for immediate metal, the widest in this record. Copper’s equivalent premium sits at $56, having been $290 two sessions earlier — its price rose while its urgency drained away. Two metals, the same week, opposite signals at the front of the curve.
Reporting today made a point that deserves repeating: official prices, closing prices and three-month values are three separate series, and they do not agree with one another on the same day. Anyone settling a contract against “the exchange price” without naming which one has left money to chance.
On policy: US export restrictions on black mass and tungsten-containing scrap begin 27 August, now four days away, with no published rule text, covered-item list or tariff codes in circulation. This is not a general US scrap export ban. 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 — prices for delivery in successive future months. Rising with time is contango; falling is backwardation.
- Front month vs deferred — the nearest delivery month against the later ones. They can move in different directions and often do.
- Cash vs three-month — metal for immediate versus three-month delivery on the exchange.
- Settlement price — the official end-of-day price a contract settles against, as distinct from an approximate or intraday quote.
- Peak season surcharge — a temporary per-container charge added by a carrier on top of the base freight rate.