Daily Market Note — 2026-09-02

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

The read

The offer side of the Pakistan market has caught up with where the published index already was — and that is a smaller event than it sounds.

For most of last week the gap in this market was not between buyers and sellers. It was between what commentary said Pakistan was worth and what the only published index for the trade had already recorded. The index printed $419.96 per tonne CFR Port Qasim on 28 August, with deals concluded that week at $417–422, standard offers at $420–425 and good-yard material above $425. Commentary through the same period held an anchor of $414–415 and a buyer band of $410–412.

This week the offers moved up rather than the index moving down. UK-origin shredded is now reported offered at $418–420 CFR Port Qasim, and UAE-origin material at $420–430. The commentary anchor of $414–415 is unchanged and now rests on the same 2,000–3,000 tonne UK cargo it has referenced for roughly a week.

Two things follow, and they point in opposite directions. First, the level was real — the market did absorb the late-August cost push rather than refusing it, which is the opposite of what a lot of commentary expected. Second, nothing has confirmed it since. No fresh Pakistan transaction at or above $418 has been verified, and the reason offers rose in the first place was a supply constraint — container shortages and collection difficulty — rather than a demand recovery.

A logistics-driven level can unwind when the logistics ease. The useful distinction to keep asking about is whether a supplier’s increase is in the material or in the freight, because those two have very different half-lives.

Key moves

• Pakistan imported scrap — no new published assessment reached the market this session. The most recent index print remains $419.96/MT CFR Port Qasim from 28 August. Current reported offers: UK-origin $418–420, UAE-origin $420–430. The top of the UAE range sits above the published good-yard tier, which is worth noting before treating it as a market level rather than one seller’s position.
• A note on the published index itself, for anyone who follows it: the consultation on cutting this assessment from twice-weekly to weekly Friday publication closes today, with the change effective 11 September. Observation density on the only public Pakistan scrap index roughly halves from that date.
• Turkey — the forward curve has crossed over the physical market, and quickly. The exchange contract for steel scrap CFR Turkey closed around $392/MT, up roughly 2.1%. The most recent physical assessments put imported HMS 80:20 into Turkey at about $375/MT CFR, with US-origin tradable near $375 and EU-origin indicated near $370. Three sessions ago the nearest exchange contract was trading slightly below the physical index. It is now roughly $16–17 above it.
• That gap is a shipment-month signal, not a prompt one. A forward contract well above the cargo market argues for a premium on later loading. It does not establish a higher price for material loading now, and it should not be quoted as though it does.
• India and Bangladesh — Indian buyers booked Senegal-origin HMS 80:20 around $372/MT CFR Mundra and West African material around $375. Bangladesh indications included Philippines HMS 90:10 around $378/MT CFR Chattogram, Singapore PNS around $415, and Japanese H2 around $384–385. Read the Indian numbers against Turkey before concluding much from reports of Indian strength: at $372–375, India is booking 80:20 at or marginally below the Turkish level for the same grade.

Freight and shipping

No rate changed this session. What moved was the reliability of the information.

The surcharge picture is unchanged in substance:

• Far East Asia → Pakistan: $1,000 per 20ft, $1,500 per 40ft/45ft, in force. Rising to $2,000 per 40ft/45ft from 15 September (South Korea from 18 September). No revised 20ft figure has been published, and none should be inferred.
• Europe → Pakistan: $300 per 20ft, $500 per 40ft, 40HC and 45HC — unchanged.

The per-tonne arithmetic is what matters. At 25–28 tonnes of dense scrap per container, $2,000 per box is $71–80 per tonne, $1,000 per box is $36–40, and a $500 change is $18–20. From 15 September on that lane, a 40ft box carries roughly twice the surcharge cost per tonne of a 20ft box — and because dense scrap is weight-limited rather than volume-limited, the larger box offers little offsetting payload advantage. Confirm the carrier’s maximum payload for each box type before relying on that comparison.

One detail worth tracking carefully rather than quoting: the published spot-booking exclusion on this surcharge has been stated, withdrawn, restated narrowly and restated broadly across four sessions. Whatever the current position, a term worth $36–40 per tonne should be confirmed by the carrier in writing rather than tracked through secondary reporting.

A caution on the widely-cited September freight increase. A per-container indication of $1,450–1,500 into Pakistan circulated in late-August reporting, together with an expectation of a $400–500 per box September step. That indication is now being correctly described as historical context rather than an executable rate, and the anticipated step is not visible in contracted base rates on the main Atlantic lanes into Port Qasim. When an increase is attributed to “September freight,” the right questions remain: which lane, which carrier, and which line of the quote — a surcharge should appear as a surcharge line; a base rate should appear on a rate sheet.

Regional risk deteriorated. The United States and Iran exchanged fresh strikes, and the IRGC warned that further attacks would tighten restrictions on the Strait of Hormuz. Brent and WTI each rose more than $4/bbl on Tuesday, with Brent settling around $94.65/bbl on 1 September and reported near $95.68 intraday on 2 September; WTI was reported near $90.83.

Two data points from the corridor sit awkwardly together and it is worth stating both. Commodity vessel transits through Hormuz were reported at four on Tuesday, well below recent averages. In the same window, the US energy secretary reported 17 million barrels of oil transiting the strait on Monday — the highest daily volume since wartime restrictions began. Both can be true: throughput depends on vessel size, cargo status and timing rather than hull count.

The measurement caution this note has made repeatedly still applies, and applies to both figures. Daily vessel counts through this corridor have been revised repeatedly, and the baseline they are compared against has now shifted three times in three weeks. A percentage built on a moving denominator is not a measurement. Throughput and direction are the sound objects; a hull count is not.

Destination operations remain normal. Port Qasim Authority’s programme for 2 September shows container vessels both sailing and berthing, with no sailing, berthing or shifting cancellations. Karachi Port continues to handle vessels and expected arrivals. Discharge is not the constraint in this trade. Carrier cost, acceptance, routing, Gulf passage and origin container equipment are.

Supplier markets

Public UK yard and US East Coast dock buying levels were again unavailable, for an eighth consecutive week. The offer side of this market remains far better published than the cost side — worth remembering whenever an increase is presented as a market fact rather than as one company’s position.

Container equipment and slot availability remain the binding supplier-side constraint for September loading, and remain unreported by any public source. It is the same constraint that publishers identified as the cause of the late-August Pakistan price move, seen from the other end of the trade.

Where sellers can quote FOB or ex-works, freight becomes priceable separately from the material. In a month when the freight number is moving very differently by lane, that separation remains the cleanest way to keep the two arguments apart. The same logic applies to timing: prompt, September, October and November loading are four different prices when the forward curve sits $16 above the physical market, and a seller who will not separate them is declining to explain a spread his own exchange is publishing.

Non-ferrous snapshot

A general caution before any figures, because it applies to a great deal of secondary reporting this week. Exchange price series are published under distinct labels — official cash, official three-month, and closing prices are separate series and are not interchangeable. They also carry distinct dates. A widely circulated summary this session attributed a set of official prices to 1 September that correspond to the 28 August session, on a set of metals that moved materially in between. Before using any exchange figure in a formula, confirm four things: the metal, the tenor, the price type, and the publication date.

On the settled figures for 1 September:

• Copper — official cash around $14,395.50/t, three-month around $14,215.00/t, a backwardation of roughly $180. Copper fell approximately 1% on both legs from the 28 August session.
• Aluminium — official cash and three-month both around $3,261.00/t, i.e. flat between the two tenors after several weeks of contango. Aluminium rose on both legs. A contango closing to zero is a prompt-tightening signal and is easy to miss if only levels are compared.
• Zinc — official cash around $4,115.00/t, three-month around $3,937.00/t, a backwardation of roughly $178 which widened materially on the session. The cash figure is a new high for the current episode. Cash rose considerably more than three-month, which is a prompt story rather than a curve-wide re-rating.

Reported official figures for nickel (cash roughly $16,830–16,850/t), lead (roughly $1,878–1,880/t) and tin (roughly $55,075–55,125/t) carry the dating caveat above and should be verified against the exchange’s own publication before use.

In scrap-specific commentary, imported aluminium scrap prices in India were reported weaker week on week on subdued demand.

Glossary

• CFR — cost and freight; the seller pays ocean freight to the destination port, the buyer carries insurance and transit risk.
• FOB / EXW — free on board / ex works; the buyer arranges and pays for onward transport, so freight is priced separately from the material.
• Port Qasim — Pakistan’s main deep-water import terminal, near Karachi.
• Shredded — processed scrap of consistent size and density, the main containerised grade into Pakistan.
• HMS 1&2 80:20 — heavy melting scrap in a standard 80:20 grade mix, the benchmark bulk ferrous grade.
• PNS — plate and structural scrap; heavier and higher-yielding than HMS.
• PSS — peak season surcharge, a temporary carrier charge added to base ocean freight, quoted per container.
• 20ft / 40ft / 45ft — container sizes. Dense cargo such as scrap is limited by weight rather than volume, so a larger box does not necessarily carry more tonnes.
• Backwardation / contango — cash above forward, or cash below forward. Backwardation generally indicates prompt tightness; a contango closing toward zero indicates prompt tightening.
• Official cash vs three-month — two distinct exchange price series; cash settles near-immediately, three-month is the forward benchmark. They routinely differ materially and must not be mixed in one formula.