Europe-India ferrous scrap freight firms w-o-w amid tighter vessel space

• Europe-India freight strengthens; Australia-India rates remain stable
• Weak import economics and bid-offer gaps continue to limit booking activity

India-bound ferrous scrap container freight rates remained firm in the week ended 13 August, although import activity stayed subdued. Europe-India rates from London Gateway to Chennai and JNPT increased w-o-w, supported by tighter vessel space and firmer carrier pricing. Melbourne-Chennai freight, meanwhile, remained stable amid balanced vessel availability.

The firmer European freight market contrasted with weak scrap buying. Indian buyers remained cautious because of poor import economics, firm domestic scrap prices and persistent bid-offer gaps. While billet exports have improved and are supporting some recovery in scrap demand, this has yet to translate into a meaningful increase in container bookings.

A shipbroker said fixture activity remained very low during the monsoon season, with sourcing enquiries spread across Europe, Africa, the US, the Middle East and Southeast Asia. Another market participant noted that limited buyer liquidity continued to weigh on domestic purchasing, while elevated LME levels could further pressure steel production if sustained.

Europe-India freight continued to strengthen as available vessel space tightened and carriers maintained firm pricing. The increase came despite limited scrap booking activity, indicating that freight movement was being driven more by shipping-side conditions than cargo demand.

Australia-India freight remained broadly unchanged, with balanced tonnage availability offsetting subdued Indian demand. Stronger demand from Southeast Asia also diverted some regional scrap flows away from India.

Route-wise update

Market highlights

• CFI rises 2.2% w-o-w: The Shanghai Containerized Freight Index (SCFI) increased to 3,276.14 on 7 August from 3,205.97 on 31 July, despite softer rates across three of the four major lanes assessed. The composite increase indicates that gains on the stronger trade lanes outweighed declines elsewhere, keeping overall container freight sentiment supported despite some easing across major routes.
• Bunker costs increase: Bunker prices rose $39/tonne (t) (3%) w-o-w to $840/t on 13 August from $801/t, driven by firmer marine fuel costs. The increase raises voyage expenses for shipowners, potentially prompting carriers to seek higher freight rates or pass through additional fuel-related surcharges.

Outlook

India-bound ferrous scrap container freight is likely to remain stable to firm in the coming weeks. Europe-India rates could retain upward pressure if vessel space remains tight, while higher bunker costs may reinforce carrier pricing.

However, weak import economics, limited buyer liquidity and wide bid-offer gaps are likely to restrict booking volumes. Australia-India freight should remain broadly stable unless vessel availability or Indian scrap demand changes materially.