Ferrous scrap suppliers trading with Pakistan are experiencing rising costs due to emergency surcharges imposed by major container shipping companies. The new fees follow recent geopolitical tensions between Pakistan and India, which led to days of hostilities before a tentative ceasefire was agreed on May 10.
Maersk has introduced a surcharge of $300 per container on shipments to Pakistan from all countries except those in the Asia-Pacific region, effective from May 21 or June 13, depending on origin. Other shipping firms, including MSC, Hapag-Lloyd, and CMA CGM, have announced fees ranging from $300 to $800 per container for imports and exports, set to take effect in mid-May or early June.
Pakistan and India responded to the conflict by banning merchant vessels flying the other country’s flag from their ports. Shipping routes have been adjusted accordingly, but Maersk reported signs of stabilization and expects operations to return to normal. While Indian imports and exports can still pass through Pakistan’s ports, Pakistan’s exports remain restricted from transiting through Indian ports.
The additional freight costs are limiting exporter interest, with some market sources expecting the surcharges to be temporary. Scrap suppliers estimate that prices would need to rise by approximately $10 per ton to absorb the new charges, but buyer bids remain unchanged. Containerized shredded scrap prices in southern Pakistan have stayed within the $370-375 per ton range, while domestic supply sources remain firm on pricing, complicating trade viability.
