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Chinese Premier Li Keqiang announced measures on March 3 during a State Council meeting to reduce several port fees.
Port construction duties have been suspended until June 30. The port construction duty is a levy on businesses using the port facilities which the port authorities collect for the upkeep and maintenance of the port. This exemption applies to both import and export activities in China.
Meanwhile, harbor dues have been cut and port facility security charges slashed by 20% across all Chinese ports. Rates vary by product, so the percentage decrease will have a different cash value for commodities.
Container detention charges will also be cut by half.
Market participants have reported significant difficulties in the logistics sector since the outbreak of the novel coronavirus (2019-nCoV).
Beijing stopped workers returning to their workplaces after Chinese New Year to stem the spread of the coronavirus. This meant port logistics ground to a standstill because there were no port workers to unload incoming cargoes and no truck drivers available to transport material domestically to the ports to reload the docked ships.
This has caused particular issues for those shipping material by containers.
There are over 1 million 20-foot equivalent (TEUs) containers sitting at ports across China, according to one minerals trader. A shipping source put that figure at 1.7 million.
Several commodities priced by Fastmarkets are shipped in containers, but this situation is yet to greatly affect the price of these materials. The price for TEU usage has risen to $1,400 from $1,100 due to the lack of available logistics, according to one iodine consumer. This is a nominal increase in the overall cost of most materials; for example a container of iodine costs $700,000 when using the low-end of Fastmarkets spot price range.
Fastmarkets assessed the price of iodine min 99.5%, spot, delivered US/EU, cif Asia at $35-39 per kg on March 6, unchanged week on week, but up from $34-39 per kg at the start of the year.
Market participants attributed the $1 increase on the low end of the range to undersupply in the market.
Similarly, in minor metals, prices remain unaffected by the slowdown in logistics and shipping.
Fastmarkets’ price for molybdenum drummed molybdic oxide 57% Mo min, in-whs Rotterdam was at $9.35-9.45 per lb on March 6.
The assessment has fallen since the outbreak of the coronavirus, but this was due to weak consumer demand and a global economic slowdown following the outbreak rather than logistical issues.
The slow recovery in in the logistics sector is causing delays to deliveries and may influence prices, which market participants are keeping a keen eye on.
Additional reporting by Susan Zou in Shanghai and Ewa Manthey in London.