Freight in bulk from Japan to Vietnam for 5,000 tonnes of scrap sat at around $30 per tonne on Friday October 23, up by $2-3 per tonne from prices in the summer, a Japanese supplier said, adding that he had also seen container freight costs “rocketing”.

The freight rate from Japan to India was $1,050 per container for November loading on Thursday, according to a South Asian trader dealing both ferrous and non-ferrous scrap. That was up from $480 per container just two weeks back, he said.

Port strikes in Australia have drastically slowed the movement of containers in Asia over the last month, with key regional scrap markets such as Indonesia and Hong Kong struggling to obtain enough boxes to cover their needs. In Latin America, a shortage of containers has dried up the volume of offers for scrap to Bangladesh and India.

At the same time, shipping markets are enjoying a bounce amid both stronger global demand and the grain harvest season - which began in August - eating up available freight capacity, sources said.

“Freight operators love grain - it is clean and there is a quick turnaround due to shorter voyages. Shipping scrap is dirty and containers must be cleaned before and after the voyage,” a scrap exporter source said.

“Shipping scrap to South Asia from Europe is a long voyage so operators will charge a higher rate because they cannot make as many trips. There is also very little exported from India or Bangladesh in 40ft containers, so these boxes must go on ballast to Singapore or Nepal to get something,” he added.

“A lot of handysize ships got moved out to America for the grain season and moved away from Asia in recent months,” a Singaporean scrap trader said.

Higher freight costs drove up prices for containerized import scrap to Bangladesh on Thursday, despite poor local steel demand in the South Asian nation, market sources said.

Fastmarkets’ price assessment for steel scrap, HMS 1&2 (80:20), containerized, import, cfr Bangladesh was $310-316 per tonne cfr on Thursday, up by $7-10 per tonne from $300-309 per tonne cfr one week earlier.

The South Asian trader told Fastmarkets that higher bulk freight rates were also pushing up offer prices from the US West Coast for deep-sea cargoes to Bangladesh over the last week.

Bulk freight from the US West Coast to Bangladesh’s Chattogram port was heard at $50 per tonne on Thursday, up by $5-10 per tonne from $40-45 per tonne two weeks ago, with US sellers said to be targeting $325 per tonne cfr Bangladesh for HMS 1&2 (80:20) in bulk, up from $320 per tonne cfr one week before.

The higher freight costs were also reflected in the container freight index issued by the Ningbo Shipping Exchange (NBSE), which has hit all-time highs this month and rose by 2.7% week on week to 1,211.4 points on October 16.

Higher earnings on both dry bulk and container freight segments has limited ship recycling from both of these segments in recent times, according to Allied Shipbroking, which added that shipbreaking yards in South Asia have only been able to keep inflows going by raising offer prices.