Container shortage disrupts India's Mn alloy exports

India's manganese alloy exporters are facing significant logistical challenges because of container shortages, rising ocean freight rates, and worsening port congestion across the country.

Exporters have found their profits squeezed not only by falling alloy prices but also by the rising costs of imported and domestic ore, alongside increased freight charges, they said. These issues have forced them to reroute their shipments from eastern India to southern India in the past two weeks.

In eastern India, freight rates to Europe and the US have surged. Freight rates have spiked by approximately $2,000/container to $4,000/container over the last two weeks for shipments to Europe's Rotterdam port, and soared to $5,000/container for shipments to Houston, US.

There are long queues of ships waiting for berths, which have delayed deliveries of manganese alloy, and have also made it more difficult for exporters to finalise deals, they said.

The current delays for obtaining available containers are around 10-15 days.

Containers are more readily available in southern India. Some traders that export from both Kolkata and Vizag ports have shifted operations to Vizag because of the shorter waiting times for containers. But many exporters still find it hard to send product to Europe and the US because securing availability on container vessels heading west is more difficult compared to vessels heading to countries in Asia-Pacific.

India's manganese alloy exports decreased by 8pc to 537,748t in January-April this year compared to 586,315t in the same period last year, according to customs data.

But European demand for Indian manganese alloy is currently subdued because of the summer lull. Some European consumers are undergoing maintenances from now until late July. Market participants anticipate demand will likely pick up between late July to mid-August. Buyers have adopted a cautious approach, booking cargoes only for immediate requirements.

Manufacturers expect container freight rates to fall back to lower levels by late September to October.

But the impact of container shortages in the ferro-chrome market, which is another commodity that heavily relies on imported raw materials, and which India exports large volumes of, has been limited. This is because demand from the global stainless steel industry has been subdued and there is limited export opportunity.

Argus assessed prices for India's silico-manganese 65pc alloy at $1,110-1,130/t fob east coast on 4 July from $1,120-1,140/t fob on 2 July, while 60pc alloy inched down to $940-960/t fob east coast from $950-980/t fob.

By Deepika Singh