India's border closures and looming nationwide lockdown in the coming days to contain the spread of the coronavirus are prompting market concerns about delivery and supply chain disruptions for one of the world's biggest metal consumers.
As the number of coronavirus cases spiked in India, the government closed border points and stopped all passenger movement between neighbouring countries on 15 March. Last week, India stopped issuing travel visas until 15 April.
Many non-essential services, including private offices, have been ordered to shut in Delhi, Mumbai, Pune, Pimpri Chinchwad and Nagpur until 31 March.
The Indian government is also considering restricting interstate travel and custom, which would affect the movement of goods in the country and could impact demand and supply chain in the metal industry. Scrap metal sales to India and global prices will be hit if there are delivery and supply chain disruptions in the country.
India is the second biggest non-ferrous scrap metal importer after China. The country imported 250,866t of copper, 20,295t of brass, 907,910t of aluminium and 193,326t of stainless steel scrap last year, custom data show.
Although the number of Indian coronavirus cases was last reported at 223, with 5 related deaths, far below the 200,000 cases reported in Europe and China, the government wants to move fast to prevent an outbreak in the world's second most populous country.
"The government wants to control the spread of coronavirus because of the huge population. It's 1.3bn and densely populated. It'll be a disaster if it spreads further. That's why the government is locking down before it spreads," a Singapore-based trading company said.
There was some confusion as to whether Indian customs will be shut next week, potentially disrupting inbound shipments of scrap, because it is unclear whether customs is considered a government department.
"Government entities are closed next week. They are still checking whether customs is categorised as government. There's nothing concrete. In the next few days, we will get more clarity on that," the first trading firm said.
Others claimed it is unlikely that India will shut down its customs facility, as it would create congestion and chaos for all the ports as cargoes will not be given clearance to enter the country.
"Although the port authorities wanted to close, as this would cause mayhem, this is not going to happen. Instead, some [customs employees] will work from home, but the ports will remain open. But anything is possible, as things seem to change by the minute," a scrap trading firm said.
In the meantime, there has been no reported disruption to imports and exports in India, but the ever-evolving situation will be watched closely in the coming days.
