Daily Market Note — 2026-08-25
Market commentary on the global ferrous scrap trade. Not trading advice.
The read
Oil fell more than three dollars and shipping got worse. Those two facts belong in the same sentence, because the temptation is to treat the first as relief and the second as noise — and it is the wrong way round.
Brent traded around $91.27 a barrel and WTI around $84.25 on Tuesday morning, after both fell more than 2% on Monday. That ends a seven-session run higher and takes crude back roughly $3 from where it settled on Friday.
Over the same period: only two commodity vessels transited the Strait of Hormuz on Monday, an oil tanker was struck and disabled by an unidentified projectile near Oman on Tuesday, and Iran has named 45 tankers it says violated transit rules, threatening action including cargo confiscation.
Oil is an input to freight. It is not the price of freight. Insurance, route acceptance, equipment positioning, war-risk treatment and carrier surcharges are all still abnormal, and none of them re-price because crude did. The reporting we follow declined to convert the fall into freight relief — the second consecutive session it has refused to, and on a larger move than the day before. That is the right call.
One caution on the vessel numbers themselves. Monday’s figure was described as the lowest daily tally since early May; our own record of this series has an equally low reading nine days ago. These counts are useful for direction and unreliable as records. Treat superlatives about them carefully.
Key moves
Imported ferrous scrap into Pakistan is assessed at $412–$415 a tonne CFR, broadly stable week on week — the fifth consecutive session at that level, and consistent with the last published index print of $413.88 on 21 August.
The finer detail reported yesterday — where buyers were bidding, where high-grade material was being offered, and the range at which European cargoes were heard to have traded — was not restated today. That does not make it wrong. It makes it one day old, and it should be described that way rather than quoted as current. A market picture that splits into bids and offers for a single session, then reverts to one number, is telling you how thin the reporting is, not how thin the market is.
Pakistani finished-steel prices remain under pressure while imported scrap holds. Flat input against softer output compresses the melting margin, and that caps what a mill is able to pay before it caps what it is willing to pay. It sits on top of a record import month already on the record: 408,041 tonnes in July, up 24.6% on June and 42.6% year on year. Material that has already arrived does not need to be replaced in a hurry.
On Turkey, there is no number to report. The exchange reference we track was described only as “refreshed” — no price, no delivery month. It carried five delivery months two sessions ago and one yesterday. The most recent actual physical prints, from 21 August data, remain the usable marks: general 80:20 grade at $373.00, Baltic-origin at $372.50, and the US-origin assessment at $375.21.
Freight and shipping
Nothing has been withdrawn from the surcharge stack, and nothing has been reduced.
A peak-season surcharge from European origins into Pakistan remains active at $300 per 20-foot and $500 per 40-foot, 40HC and 45HC container. A separate surcharge from Far East Asian origins takes effect on 31 August at $1,000 per 20-foot and $1,500 per 40-foot or 45-foot — and those levels are unchanged from when the charge was first announced, which resolves a question left open last week. What changed was which origins it covers, not what it costs.
The arithmetic worth keeping is the same one as last week, and it gets more expensive as the charges get bigger:
| Per-container charge | 25 tonnes | 27 tonnes | 28 tonnes |
|---|---|---|---|
| $300 | $12.00/t | $11.11/t | $10.71/t |
| $500 | $20.00/t | $18.52/t | $17.86/t |
| $1,000 | $40.00/t | $37.04/t | $35.71/t |
| $1,500 | $60.00/t | $55.56/t | $53.57/t |
At $500 a container, the difference between loading 25 and 28 tonnes is $2.14 a tonne. At $1,500 it is $6.43. Payload is a price.
Policy
The United States published a new Iran sanctions package on 24 August, designating 60 individuals, entities and vessels, and expanding secondary-sanctions exposure — meaning it can reach banks, carriers and owners with no direct US connection of their own. Iran has said it will retaliate. Separately, Pakistan reports progress in mediation talks with Tehran, partly aimed at reopening Hormuz.
For anyone moving cargo through the region, the practical point is narrow and worth stating plainly: this is not a scrap measure and it should not be quoted as a reason a scrap price should move. What it changes is the probability that a shipment cannot be paid for, insured or carried as planned — a different kind of risk, and one that is far cheaper to check before a letter of credit is opened than afterwards.
A second, unrelated US measure takes effect on 27 August: export restrictions affecting black mass and tungsten-containing scrap. This is the first time the scope has been described in commodity terms rather than as a category, which makes it something a yard can actually screen for. It is not a general US scrap export ban, and it does not touch ferrous. Rule text, covered-item lists and tariff codes are still not in circulation with two days to run.
Non-ferrous snapshot
On the published LME official settlements for 24 August: copper cash $14,344.00 and three-month $14,245.00; zinc cash $3,985.00 and three-month $3,840.00; aluminium cash $3,215.50 and three-month $3,235.00.
Zinc is the story. That cash figure is the highest in our record, and the premium for immediate metal over three-month metal stands at $145 — near the widest we have logged. Prompt zinc is tight, not loose. Copper carries a $99 premium on the same basis; aluminium runs the other way, with three-month metal $19.50 dearer than cash.
A point we have made before and which was demonstrated again today: cash, official, closing and three-month are four different series, and a figure quoted without its date and its price type is not a reference. The gap between a correctly dated official price and a stale one, on the same metal and the same nominal date, ran to more than $200 a tonne in one case this week. Anyone pricing a formula-based non-ferrous parcel should be pulling the same-day official at the moment of quoting, and naming the exchange, the tenor, the price type and the fixing date in the contract.
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.
- Cash vs three-month — metal for immediate versus three-month delivery on the exchange. When cash is dearer, the market is in backwardation; when three-month is dearer, contango.
- Official price — the exchange’s formally published fix for the day, distinct from the closing price, which is taken at a different point in the trading session.
- Peak season surcharge — a temporary per-container charge added by a carrier on top of the base freight rate.
- Payload — the tonnage actually loaded into a container. Per-container charges divided by a smaller payload produce a higher cost per tonne.
- Secondary sanctions — measures that can reach parties outside the sanctioning country’s own jurisdiction, on the basis of their dealings with designated entities.
- Black mass — the powdered, metal-rich material recovered from shredded lithium-ion batteries.