Leading European and UK steel ports are so full they are having to turn material away.
A vessel destined for a UK port had to be re-routed to Gent in Belgium two weeks ago, as the two ports it tried to call at would not accept the material. Another vessel, currently carrying coil from India, has also had to be re-routed to Europe as the UK destination cannot accept it — freight forwarders in Antwerp have also said they cannot accept the cargo given a lack of space.
In Antwerp, one freight forwarder alone had over 200,000t of steel, with significant amounts on the way. At the market’s zenith, when it was unclear how much steel buyers could procure domestically, they ordered more than usual from imports. That material has been arriving in recent months. For example, imports of wide-strip were up by 9pc year on year in June, after increasing by almost 50pc in May and 191pc in April, Eurostat data show. The trend of elevated imports is likely to continue, based on the amount of material being sold into quotas. Another 35 vessels could unload steel between now and Christmas, UK traders said.
Some leading stevedores in Antwerp are turning away spot vessels, and only taking deliveries from shipping lines they have contracts with, given constrained storage — especially inside. They are also limiting free storage periods and instructing companies to move cargoes after four weeks or it will have to be moved to hinterland warehouses. One forwarder said it had more than double the stocks of last year.
Antwerp has a massive 579 ships at berth, 47.85pc of which are cargo ships, and a port activity index of 92, according to vessel tracking software Fleetmon. To put this in context, Shanghai, the largest port in the world in throughput terms, only has a marginally higher port activity index of 98. The port has been hit by Covid-19 outbreaks and suffered severe congestion.
One freight forwarder said around 20,000t is leaving terminals each week, but 30,000-40,000t is arriving. Quotas are clearly exacerbating the problems, as buyers are not customs clearing material where 25pc duties are payable. Russia’s 416,000t quota went critical today, and significant tonnages are likely to arrive in the next quarter, given the competitiveness of their offers, and likelihood some tonnes will be held over for the next few weeks.
The country-by-country nature of quotas, and the new investigations underway and potentially on the horizon, means the vast majority of origins are now being tracked, certainly for flat-rolled products.
Logistics constraints are exacerbating the problems. Shortages of drivers and trucks, especially in the UK, mean buyers cannot move material quickly, even if they want to customs clear.
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