India-bound scrap freights firm w-o-w on capacity constraints despite weak demand

• Carrier surcharges, equipment shortages support key routes
• Limited Indian scrap bookings cap broader freight gains

India-bound ferrous scrap container freight rates firmed across key routes in the week ended 27 August, despite subdued import demand. The increase was driven mainly by carrier surcharges, tight vessel space and equipment constraints rather than stronger scrap procurement by Indian mills.

“London Gateway-India rates remained under upward pressure as carriers maintained higher surcharges on Northern Europe-South Asia services. Better netbacks for UK-origin scrap into Pakistan and Bangladesh also supported container demand, keeping Atlantic freights firm,” a UK-based shipowner said.

Indian mills continued to prioritise domestic scrap and pig iron, restricting imported scrap procurement largely to immediate requirements. Wide bid-offer gaps further limited bookings, resulting in mixed sentiment across freight routes.

Route-wise sentiment

Market highlights

• SCFI rises 1.62% w-o-w: The Shanghai Containerized Freight Index increased to 3,409.63 on 21 August from 3,355.24 on 14 August. The rise reflected relative strength in the trans-Pacific market, while weaker Europe-bound trades highlighted diverging conditions across major container shipping routes
• Bunker prices soften w-o-w: Singapore VLSFO (Very Low Sulphur Fuel Oil) bunker prices declined by $49/tonne (t), or 6.0%, to $772/t as of 27 August from $821/t a week earlier. The reduction eased vessel operating cost pressure but was insufficient to offset freight support from surcharges and capacity constraints

Outlook

India-bound ferrous scrap container freights are expected to remain mixed in the coming week, with Atlantic routes likely to stay firm amid higher surcharges, tight capacity and sustained UK scrap flows to South Asia. Australia-India freight may also remain supported by equipment constraints, although limited Indian import demand is likely to restrict sharper gains.

Overall, shipping-side constraints are currently providing stronger support to freights than underlying scrap demand. However, a sustained broad-based increase may require a recovery in India-bound scrap bookings.