Container logistics dog seaborne ferrous scrap trade

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Logistics complications surrounding containerized ferrous scrap exports can continue steadily to stifle shipments into early 2021 due to demand and supply-side factors force seaborne scrap prices found in Taiwan and other southeast Asian countries toward record highs to close 2020.

In new weeks, scrap exporters reported difficulty in acquiring bookings for ferrous shipments into southeast Asia as shipping lines lowered the priority of scrap metal cargoes. Taiwanese clients told Argus the quantity of container scrap offers from US suppliers has fallen by 50-60pc from normal levels due to this fact, while others suggested the lower has been a lot more dramatic.

US west coast exporters suggested delivery lines are reacting to comprehensive turnaround circumstances at unloading ports and seasonal demand for containers found in Asia to export holiday items, with some shipping lines choosing to send empty containers back again to Asia to expedite the procedure.

"There are so various goods looking for their way into the US at the moment from Asia that shipping companies would prefer to send empties back again to Asia than await scrap to end up being processed at ports," said one US west coast trader.

The delays echo a number of the disruption the container trade saw between March and June during the early days of the coronavirus pandemic.

"The problem isn't on the loading side, but on the delivery side," a California-based scrap supplier said. "It might take up to a week for the container to clear customs, obtain loaded onto a truck, and return to the shipper."

In another move targeted at accelerating the activity of containers back into Asia, ocean carriers were heard to lessen the quantity of "free days" issued to those with a container reserving. "Free days" are an allotment of time directed at process and unload containers and go back them to the carrier before the shipping line starts charging demurrage fees.

Some delivery companies instituted a lottery system to choose bids which would get a confirmed delivery slot. Shipping lines also increased charges for "rolling over" a container reserving onto a distinct vessel, occasionally charging $30/container.

The inability to easily ship containerized freight has played out alongside a surge in global ferrous scrap prices. In the main element import hub of Taiwan, prices for HMS 1/2 80:20 possess climbed by $110/t since October to $375/t cfr, the best levels record since Argus began assessing the market in September 2016. US gives for HMS 1/2 80:20 climbed as huge as $350/t fas LA by 11 December, the best price levels seen since March 2018.

Other scrap markets have also climbed to multi-year highs amid the logistics difficulties. Containerized shredded scrap charges for cfr Bangladesh has already reached $420-425/t while fas NY moved above $360/t, both highest since March 2018.

Exporters anticipate troubles to extend at least through the Chinese lunar new year, which poses logistical complications annually, but the added wrinkle of the coronavirus pandemic offers obfuscated when shipping problems could clear.

"It's very unusual," said a US west coast trader. "I can't get yourself a container booking until January. I've attempted several different lines, this is simply not a seasonal event."

US-based exporters are contending with increasing freight costs on the subject of bookings into Asia, with several exporters stating freight costs doubled on December. Argus assessed freight rates from LA to Taiwan at $7-10/t in October after historically low prices of $6-8/t in September. By December, rates have risen to as high as $9-15/t.

European exporters also observed difficulty on booking vessel space throughout December up to mid-January. Although reserving spaces are available, one exporter explained the freight price being charged on a spot rate basis is dual the normal prices and difficult to create viable.

UK ports are heard to be congested with large numbers of export containers laying in ports for typically three to four weeks. Some exporters anticipate the import volume into UK ports, along with other global ports, will start to reduce as holiday shipping starts to cool which should let export containers to keep ports.

Source: https://www.argusmedia.com

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