Indian exporters of ADC 12 and brass billets to China’s Ningbo port are facing a shortage of containers on the Indo-China route. The crunch could hurt India’s exports to China, inform producers.
Increased demand, reduced imports, and port rotation issues due to the COVID-19 pandemic has caused a severe shortage of containers. Most shipping companies are thus refusing to ferry empty containers and chose to deploy vessels on more profitable routes.
To put things into perspective, secondary aluminium alloy manufacturers from North India export around 10,000mt of ADC 12 alloys to China in a month, which collectively require 400 TEUs, each loaded with 25mt material. But amid the scarcity, a manufacturer in Northern India told Davis Index that he is struggling to find containers for the last 15 days. Brass billet and ingot manufacturers from Jamnagar collectively export around 1,000mt to China, which requires around 30-40 containers each month. They too had similar stories to share.
Alloy manufacturers are hoping that Commerce and Shipping Ministry intervenes and resolves this issue at the earliest, considering they are even paying higher freight rates of $300/TEU from the usual $100/TEU.
With this shortfall, producers are dealing with a triple-whammy since China’s revised scrap quotas are already pressuring ADC 12 exports. To top it all, they could lose out encashing the upward revision of prices by ADC 12 buyers in China. Their purchase prices are presently at $1,775/mt cfr China for ADC 12 alloys imported from India, which barely crossed $1,700/mt in Sept.
The Federation of Indian Export Organisations (FIEO) has already raised this issue with the Indian Maritime Authority Director General of Shipping. FIEO has urged the Director-General of Shipping to help them secure empty containers.
Among others, on the India-US route, freight rates have increased by 60pc, 50pc on the route to Africa, and have almost doubled for the India-Europe route.