As more and more economies start to bounce back, driven mostly by government stimulus packages, we are seeing an unprecedented commodity super-cycle in full swing. Prices for steel and ferrous scrap have already broken 10-year highs on the back of strong demand, and this is expected to continue in the near term.
Vessel availability for bulk cargoes as well as container availability are serious concerns for the scrap industry, especially in markets such as Pakistan and Bangladesh which are heavily reliant on imported ferrous scrap. Freight charges have also reached record highs and the current challenges on the supply side of the logistics chain are expected to continue in the near future.
In a cruel twist, India has suffered a massive second wave of COVID infections, resulting in a devastating loss of life and in local governments once again imposing lockdowns across various parts of the country. After seeming to have the pandemic under control and with the Indian economy showing tremendous growth at the start of this year, the situation has fully reversed. Industrial activity has slowed as almost all steel mills have had to divert oxygen for medical use.
India must now plan ahead so it is better prepared to deal with a potential third COVID wave later this year.
Nathani Group of Companies (IND), Vice-President of the BIR Ferrous Division