India’s steel scrap import activity which was already at a standstill has been dealt a fresh blow with the government’s direction that container carriers should not levy detention or demurrage charges prompting several shipping lines not to direct tonnages to most state-run ports, SteelOrbis has been informed.
According to traders, imported scrap prices have crashed during the past week, but prices had become irrelevant as not only secondary steel mills had halted operations, but also because import logistics have become almost impossible during the ongoing national lockdown. While no official price was available for either ex-US or ex-UK shredded scrap, market sources said that ex-UAE scrap prices received by at least two Gujarat-based secondary steel mills cum trading firms have ranged at $220-230/mt CFR, compared to $245-250/mt CFR in the previous week. There have been some reports in the market that, following the sharp rise of scrap prices in Turkey, the suppliers from Europe who have allocations or traders have been testing the market with offers at $260/mt CFR India and higher. But most customers have said that, in the current complex conditions, it does not make sense for them to negotiate as they fear shipments getting stuck at ports or being declined by shipping lines after contracts are concluded.
Market sources said that the Director General Shipping (DGS) in a communication to all major state-run ports has advised shipping lines and carriers not to levy container detention charges on import and export cargoes until April 14 or further notice. With shipping lines not permitted to charge any levy for delays in berthing at major ports and since freight rates are charged on daily per container basis and since, following the DGS order, shipping lines would not be able to claim any charge based on per day detention of containers at ports, several shipping lines were declining to send tonnages to India in the absence of demurrage claims, the sources said.
“Import activity can only return once there is clarity on the continuation of the lockdown and the situation at the ports,” a member of the Metal Recycling Association of India (MRAI) said.
Meanwhile, scrap prices in the local market have continued to slide in reaction to the excess supplies at stockyards and the absence of bookings by secondary steel mills. Sources said that scrap prices are down INR 300/mt ($4/mt) to INR 22,750/mt ($301/mt) ex-stock yard at Mandi Govindgarh in the north. Prices are down INR 200/mt ($3/mt) week on week to INR 21,000/mt ($280/mt) ex-stockyard at Alang in the west.
$1 = INR 75.65