India-bound scrap container freight edges higher on vessel space constraints

• Shipowner-led increases and vessel-space constraints lift India-bound freight
• Indian scrap imports remain subdued as Pakistan emerges as more active buyer

India-bound ferrous scrap container freight rates have increased in early September, although the rise is not linked to stronger Indian scrap demand. Market participants attributed the increase to higher carrier freight offers amid inventory management, tighter vessel availability and capacity constraints.

The supply-side pressure is particularly visible on the UK/EU-India trade, where vessel space and haulage availability remain tight. Despite firmer domestic scrap prices and improving steel sales as the monsoon season approaches its end. Indian import bookings remain extremely limited, with market participants describing containerized scrap imports as almost nil. Mills continue to focus largely on immediate requirements, while elevated freight offers have further reduced buying appetite.

“Freight has risen by around 5% despite weak Indian demand, with market participants attributing the increase to tighter vessel space, capacity constraints and inventory management by carriers. UK/EU services are also facing limited vessel and haulage availability, with a further $100-200/t increase being discussed from 21 September. Meanwhile, Pakistan remains the more active South Asian buyer, while Indian containerized scrap imports are almost negligible”, mentioned a source.

Route-wise sentiment

Market highlights

• SCFI edges higher w-o-w: The Shanghai Containerized Freight Index (SCFI) climbed to 3,590.05 on 4 September, up 80.52 points, or around 2.3% w-o-w, from 3,509.53 on 28 August. The increase indicates firmer container freight conditions, adding to shipping costs for exporters and importers on China-linked trade routes.
• Bunker prices rise further w-o-w: Singapore VLSFO prices increased by $20/t w-o-w to $868/t, from $848/t in the previous week. The rise in bunker costs indicates higher fuel expenses for vessel operators and could add upward pressure to freight rates, particularly on longer-haul routes.

Outlook

India-bound scrap container freight is expected to remain firm through September, but the upside is likely to remain limited by weak Indian demand. Carrier-led increases, inventory positioning, tight UK/EU vessel space and haulage constraints should keep freight elevated, while alternative breakbulk movements could gain traction where container availability becomes restrictive. As per a shipbroker, “UK-origin indications rising by as much as $100-200/t for October shipments.”