Recovering global trade in Q1 saw demand outpacing the availability of shipping space, resulting in supply chain disruptions, longer lead times and higher prices.
Multiple scrap traders reported having to fulfill or postpone shipments under pre-existing contracts while grappling with rising freight costs and limited vessel availability for April and May. Freight rates from Japan at the end of the Q1 were up to double that of the quarter before, with the cost of chartering a 5,000 dwt mini bulk vessel to Vietnam rising to $55-$60/mt from $35-$37/mt the previous quarter and rates for smaller 2,500 dwt vessels to South Korea surging to Yen 4,000/mt from Yen 2,000/mt.
As Asia-bound scrap prices tapered off at the end of March, sellers said there was little enthusiasm for the CFR market, with workable prices pressured higher by the rise in freight costs.