Container Shortage Disrupts India's Manganese Alloy Exports

India's manganese alloy exporters are currently grappling with severe logistical hurdles due to a shortage of containers, escalating ocean freight rates, and worsening port congestion nationwide. These challenges have significantly impacted their profitability, compounded by declining alloy prices and increasing costs for both imported and domestic ore, in addition to surging freight charges.

In response to these difficulties, exporters have been compelled to redirect their shipments from eastern India to southern India over the past fortnight. Freight rates from eastern India to Europe and the US have surged dramatically, with costs for shipping to Rotterdam, Europe, rising by approximately $2,000 per container to $4,000 per container. Similarly, rates for shipments to Houston, US, have skyrocketed to $5,000 per container.

The severe port congestion has resulted in long queues of ships awaiting berths, causing significant delays in manganese alloy deliveries and complicating the finalization of export deals. The current delay for securing available containers is approximately 10-15 days.

In southern India, containers are more readily available. Consequently, some traders exporting from both Kolkata and Vizag ports have shifted their operations to Vizag, benefiting from shorter container waiting times. However, many exporters continue to struggle with dispatching products to Europe and the US due to the greater difficulty in securing container vessel availability for westbound shipments compared to those headed to Asia-Pacific countries.

According to customs data, India's manganese alloy exports declined by 8% to 537,748 tons in January-April this year, compared to 586,315 tons during the same period last year. Currently, European demand for Indian manganese alloy is subdued due to the summer lull and maintenance activities undertaken by some European consumers until late July. Market participants expect demand to rebound between late July and mid-August, with buyers adopting a cautious approach by booking cargoes only for immediate needs.

Manufacturers anticipate a decline in container freight rates to more manageable levels by late September to October. Meanwhile, the impact of container shortages on the ferro-chrome market, another commodity heavily reliant on imported raw materials and significant Indian exports, has been limited. This is attributed to subdued global stainless steel industry demand and restricted export opportunities.