A sustained rally in oil prices has contributed to a recent spike in freight rates for bulk shipments of steel products, sources told Fastmarkets on Tuesday February 23.
Brent crude oil prices have risen by 74.5% since late October 2020 and even surpassed $65 per barrel on February 22, making the fueling of a vessel an increasingly expensive task.
Waning bulk vessel availability is exacerbating the situation, with a South Asian steel scrap trader saying this was due to a sharp rise in demand for ships across the global economy and particularly in China.
Vessel availability is also being reduced due to port congestion, one Beijing-based steel trader said, who highlighted heavy blockages at the Bayuquan and Tianjin ports in northeast China as prime examples of the issue.
Rates jump across markets
Freight in bulk for the India-China route has risen to $30-35 per tonne for shipments of steel billet, sources said on Tuesday, up from $22-28 per tonne earlier in the year.
The higher freight rates contributed to a rise in the China steel billet import...