India: Pacific ferrous scrap container freights ease post Iran ceasefire; Atlantic rates firm

• Need-based procurement keeps imports subdued
• Australia container rates ease as fuel surcharges remain on hold

India-bound ferrous scrap container freight rates exhibited mixed trends in the week ended 2 July. Imported ferrous scrap demand remained subdued, with limited buying interest as the gap between seller offers and buyers target prices persisted.

Weak domestic steel demand and unfavorable import economics continued to keep mills on the sidelines, resulting in predominantly need-based procurement.

An Australia-based shipbroker stated, “Containerised ferrous scrap freight rates from Australia to India have softened as Emergency Fuel surcharges (EFS) remain on hold following the easing of geopolitical tensions.”

A UK-based shipbroker informed, “Freight rates to Chennai are currently being negotiated largely on a spot basis, reflecting cautious buying sentiment and subdued market conditions.

Also, market participants noted that although overall sentiment remains weak, trading activity has improved as buyers actively seek competitively priced cargoes. Larger importers booking more per month continue to have room to negotiate freight discounts of $50-100 per container, indicating that carriers remain flexible to secure volumes.

Despite the soft market, inventory shortages and congestion at key loading ports are providing some support to freight rates, preventing a sharper decline.

Route-wise update

Market highlights

• CFI surges w-o-w: CFI rose by 117.95 points w-o-w to 3,239.64 points on 26 June from 3121.69 points on 18 June, driven by higher rates on Asia-Europe and Trans-Pacific routes amid stronger export demand, capacity constraints, and continued carrier capacity management.
• Bunker prices drop w-o-w: Bunker prices stood at $660/tonne (t) on 2 July, an decrease of $24/t w-o-w amid softer crude oil prices and easing geopolitical tensions. Lower bunker costs are expected to support vessel operating economics.

Outlook

Ferrous scrap container freight to India is expected to remain mixed in the near term. Pacific rates may stay under mild pressure amid easing geopolitical tensions and adequate vessel availability, while Atlantic freight is likely to remain firm, supported by tight cargo availability, limited vessel space, and port congestion.