Metal scrap piles up at ports as MSME importers struggle to take delivery

Mumbai: About 250,000 containers of metal scrap are lying at major ports such as Mundra, Nhava Sheva and Chennai port with 200-250 medium and small scale importers abstaining from taking delivery amid the nationwide lockdown to contain the Covid-19 pandemic.

Scrap companies that ET spoke with blamed shortage of labour, lack of logistic arrangements, heavy detention charges by some shipping companies and bureaucratic hurdles for not taking delivery of containers.

“Customs offices are open, but transports are not able to run freely,” said Ekjot Chawla, director at Arora Iron and Steel Rolling Mills, a Ludhiana-based steel products maker. “Lack of coordination from the state and centre has resulted in logistics issues…we don’t get the passes easily.”

Chawla said his company has already made shipping line payments and customs charges.

However, scrap importers said, shipping lines are also demanding hefty detention charges.

“Since March 10, around 250,000 containers to be delivered across the country is lying at the ports,” said Sanjay Mehta, president of trade body Material Recycling Association of India (MRAI). “This material is coming from the USA, New Zealand, UK and Europe. With no labourers and no transport facility, it is going to be a bloodbath for us in terms of detention charges,” he said.

The Directorate General of Shipping had on Wednesday issued an advisory to all ports and shipping companies asking them not to charge container holders any fees till May 3, when the extended lockdown is scheduled to end.

“It is now decided that for the second lockdown period, the shipping companies or carriers (and their agents by whatever name called) shall not charge, levy or recover any penal charges, demurrage, ground rent, storage charges in the port, detention charges…performance related penalties on cargo owners/consignees of non-containerised cargo for the period from April 15, 2020 to May 3, 2020,” the advisory said.

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However, scrap importers said they have received a notification from shipping companies to clear the containers on or before April 28.

“I just called up my shipping line CMA CGM to consider the ministry’s advisory, but they have asked us to remove the goods by April 28,” said Arora Steel Rolling Mill’s Ekjot.

Emails sent to CMA CGM and other shipping companies remained mostly unanswered as of press time Friday. Maersk said the company is in a silent period till May 14.

Some container carriers have informed Nhava Sheva and Mundra ports that they plan to skip calls at these ports due to lower demand and lack of exports even as they are clogged with undelivered import materials, people familiar with the development said.

As per data from MRAI, India imports 7-10 million tonnes of steel scrap every year with March being the best quarter to stock up in terms of price of the material.

Metals amount for around 30% of total scrap stuck at the port.

“Already the value of the scrap has reduced,” said Jayant Jain, secretary of All India Non-ferrous Metal Association (ANMA). “Paying detention charges and taking delivery will amount to huge losses; we would rather not take delivery at all,” he said.

Several metal scrap MSMEs have approached the shipping ministry, urging the authorities to put out orders to waive off detention and other charges for 30 days after May 3 for companies to remove the materials from ports.



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