- Tight capacity and rising surcharges reshape landed costs
- Buyers prioritise freight reliability amid cautious demand
India-bound ferrous scrap container freight is seeing heightened volatility as tight container and vessel availability, carrier surcharges, bunker costs and geopolitical disruptions reshape landed costs. While Indian buyers remain active, elevated freight and cautious steel margins are encouraging smaller, need-based purchases and greater focus on supply-chain reliability.
As Arihant Singhi, Founder & CEO of Aaasha Trading Limited, U.K., puts it, “The key change is that buyers increasingly value freight certainty and reliability, not simply the lowest quotation.”
In this interview, Singhi shares his perspective on India-bound scrap freight trends, covering container and vessel availability, carrier pricing, origin-wise dynamics, Indian buying appetite, geopolitical risks and the outlook for H2 FY27.
1. Where are India-bound ferrous scrap container freight rates headed, and are high freight costs prompting Indian buyers to delay bookings?
Freight has become a critical part of the scrap purchasing decision. Indian buyers are increasingly looking at the total landed cost, rather than the scrap price alone.
India imported approximately 7.6 million tonnes of HS 720449 ferrous scrap in 2024, worth around US$3.15 billion. This demonstrates the scale of the Indian import market.
Buyers remain active but cautious. When freight rises sharply, some buyers delay bookings or reduce quantities because steel margins become difficult. I would describe the market as disciplined rather than weak.
2. Why are we seeing more containerized shipments and smaller volumes?
Flexibility is the main reason. Container shipments allow mills and traders to buy smaller quantities, manage cash flow and diversify suppliers.
Market uncertainty has also encouraged buyers to avoid large inventory positions. When freight, currencies and steel prices are moving quickly, smaller and more frequent purchases help reduce risk.
3. How are vessel space and container availability affecting freight rates?
Equipment availability, vessel space and sailing frequency are having a significant impact. When carriers reduce capacity or equipment becomes tight, freight can increase quickly even without a major change in scrap demand.
For heavy scrap cargoes, suitable equipment is particularly important. Buyers therefore need to consider not only the rate but also space, equipment availability and schedule reliability.
4. What is the current buying appetite among Indian scrap importers?
Indian buyers remain active but highly price-sensitive. Most purchases are being made against immediate production requirements or confirmed steel sales rather than for speculative inventory.
The market is very sensitive to the combination of scrap price + freight + exchange rate. A movement in any one of these can change the buying decision.
5. How much are bunker prices, GRIs and surcharges affecting landed costs?
They have become increasingly important. Ocean freight is only one component of the landed cost; bunker-related charges, GRIs, terminal charges, security surcharges and other carrier costs can materially change the economics of a shipment.
For lower-value scrap, even a relatively small freight increase can have a meaningful impact on the final delivered cost.
6. Are carriers pushing for higher rates, and how are shippers responding?
Carriers are testing higher rates when capacity and market conditions allow. Shippers and NVOCCs are responding by comparing multiple carriers, negotiating shorter validity periods and trying to secure equipment and space earlier.
The key change is that buyers increasingly value freight certainty and reliability, not simply the lowest quotation.
7. Are freight trends different by origin?
Yes. Freight economics vary considerably between Europe, the U.K., the U.S., the UAE and Australia because of distance, vessel availability, transshipment and competing cargo flows.
In 2024, the U.S. supplied approximately 1.08 million tonnes (mnt) of HS 720449 scrap to India, while the U.K. supplied approximately 976,000 tonnes (t). This demonstrates the importance of both origins to India’s supply chain.
Competition from Bangladesh, Pakistan and Southeast Asia can also influence where traders’ direct cargo, particularly when freight economics change between destinations.
8. How are transshipment, congestion and longer transit times affecting buyers?
Longer transit times can reduce effective container availability and increase the cost of moving cargo. Delays also create uncertainty around production schedules, storage and inventory planning.
The geopolitical situation in and around the Middle East is an additional risk. Any disruption to shipping routes can affect transit time, insurance, freight and equipment availability simultaneously.
For Indian buyers, schedule reliability is therefore becoming almost as important as the freight rate itself.
9. What is your H2 FY27 outlook for India-bound ferrous scrap container freight?
I expect the second half of FY27 to remain volatile and highly dependent on market conditions, rather than following a straight upward or downward trend.
The four factors I would watch most closely are Indian steel demand, carrier capacity, bunker and energy costs, and geopolitical developments.
If Indian steel demand strengthens while capacity remains tight, freight could move higher. If demand softens and vessel and equipment availability improve, freight could ease.
The biggest wildcard remains geopolitics, particularly any disruption affecting Middle East and Red Sea shipping.
For Indian scrap buyers, the most important strategy is to manage the landed cost and supply-chain risk, rather than trying to predict freight rates in isolation. Diversified sourcing, multiple carrier options and flexible purchasing strategies can help traders and mills manage this volatility.
Note: The above are the views of the author and should not be used for investment decisions.
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