India-bound scrap container freights extend gains on tight vessel space, higher carrier costs

• Higher bunker costs, carrier-led increases offer upward pressure
• Weak scrap demand, elevated landed costs limit fresh bookings

India-bound ferrous scrap container freight rates moved higher w-o-w in the week ended 17 September, with the sharpest increase recorded on the London Gateway-JNPT route. The gains were largely driven by tight vessel/space availability, persistent inventory issues and carrier-led rate increases, rather than an improvement in Indian scrap demand. Higher bunker costs also added to operating expenses, while elevated freight continued to weigh on import economics.

The impact was particularly visible on UK-origin routes, where October freight indications may further surge, sources informed. Meanwhile, Indian buyers remained cautious as higher landed costs reduced their willingness to accept elevated scrap offers. Some buyers were reportedly delaying bookings or reducing purchase volumes until freight and landed-cost visibility improves.

“Elevated freight rates continue to pressure import economics, limiting buyers willingness to accept higher scrap offers. Container availability and shipping schedules remain important factors for procurement decisions. Higher freight is encouraging some buyers to delay bookings or reduce purchase volumes until landed-cost visibility improves.”, mentioned a source.

Weak Indian scrap demand continues to limit bookings, with Australian exporters reportedly diverting some cargoes towards Indonesia. The route therefore remains largely demand-constrained despite firm freight conditions.

Route-wise sentiment

Market highlights

• SCFI rises w-o-w: The Shanghai Containerized Freight Index (SCFI) increased by 72.13 points, or 2%, w-o-w to $3,662.18/TEU on 11 September, from $3,590.05/TEU on 4 September. The rise reflects firmer container freight conditions, supported by stronger transpacific demand, and adds to the broader upward pressure on shipping costs.
• Bunker prices rise further: Singapore VLSFO prices increased by $16/tonne (t) w-o-w to $884/t on 17 September, from $868/t previously. The continued increase in bunker costs is raising operating expenses for carriers and providing an additional basis for higher freight offers.

Outlook

India-bound scrap container freight is expected to remain firm in the near term, particularly on UK-origin routes, as vessel-space constraints, persistent inventory issues, higher bunker costs and carrier-led increases continue to support rates. As per a shipbroker, “UK-origin indications rising by as much as $200-400/t for October shipments.”

However, weak Indian scrap demand and elevated landed costs are likely to limit sustained upside. The widening freight gap on UK-origin cargoes could further encourage buyers to defer bookings or explore alternative sourcing and shipment options.