News
24/04/25
US port fees threaten some metal shippers
Pittsburgh, 24 April (Argus) — US scrap metal shippers will see varying degrees
of exposure to US Trade Representative's (USTR) revised proposal for port fees
on Chinese-built and operated ships. USTR finalized a plan 17 April to apply a
$50/net ton (nt) fee on Chinese operators and owners and a $18/nt fee on
Chinese-built ships that dock in the US. The fees will begin in mid-October with
incremental increases over the next three years. The agency determined that
China's dominance of the maritime, logistics, and shipbuilding sectors has
reduced supply chain resilience by displacing foreign firms, lessening
competition, and creating dependencies on the country. The number of US-flagged
or -built ships has decreased by 34pc since 2010 to 185 in 2024, US Bureau of
Transportation statistics data show. US-flagged or -built vessels accounted for
0.4pc of the global fleet in 2019. The fees are less severe than the industry
anticipated, but sweeping exemptions will result in uneven impacts for bulk and
container shippers. Fees largely spare bulk shippers Bulk scrap metal shippers
will have the least direct impact from the new policies because ships arriving
empty or in ballast and vessels carrying 80,000 deadweight tons (dwt) or less
will be excluded from the charges associated with using a Chinese-built ship.
Chinese-built ships account for 41pc of the 14,661 active vessels in the dry
bulk global fleet, according to global ship tracking analytics firm Kpler. Bulk
scrap exporters most commonly use Handysize vessels, but some occasionally fix
bigger ships. The average weight of a bulk ferrous scrap export vessel in 2024
was 33,500 metric tonnes (t), according to manifest data. Even the largest
Supramax vessel booked by east coast scrap exporters in 2024, the Denak D ,
would still qualify for the weight exemption. Most market participants are still
working through the notice and waiting for more details regarding the
exemptions. The USTR has not responded to requests for clarification on
exemptions. Chinese-owned and Chinese-operated vessels would still be subject to
the fees . Bulk shippers will be exposed to this direct cost, unless they shy
away from Chinese-owned or operated vessel fixtures. But competition for these
vessels will likely raise freight rates and availability as other commodity
sectors shift their bookings as well, market sources said. Mills see some
exposure on metallics US steelmakers importing bulk scrap will also broadly be
spared from higher port fees related to Chinese-built vessels because of the
weight exemptions, but some mills will be more exposed on imports of pig iron.
Pig iron shippers occasionally use Kamsarmax vessels over 80,000dwt. But the
vast majority of US pig iron imports travels in smaller vessels, such as
Supramax or Ultramax size, which tend to have capacities well below the
80,000dwt limit. USTR offered exemptions to short-haul voyages under 2,000
nautical miles, which will help to relieve costs for shipments on the Great
Lakes or between the US Gulf coast and Mexico. Mills would still be exposed to
fees on any Chinese-owned or Chinese-operated vessel. Fees put container
shippers at risk US container scrap exporters are the most vulnerable to the
USTR's finalized plan on Chinese ship operators' vessels calling at US ports.
Chinese built vessels account for about 50pc of all container ships globally, a
market source said. USTR plans to impose a fee of $120 for each container
discharged on a Chinese-built vessel beginning in mid-October with annual
increases over the next three years reaching $250 for every container in April
2028. US shippers typically load about 25t in containers on the east coast and
around 20t on the west coast. Containerized traders are bracing for higher
freight costs later this year once the fees go into effect. USTR proposed
exemptions for container vessels with a capacity no greater than 4,000
twenty-foot equivalent units (TEU), but most of the ships servicing the US
export market are minimum of 8,000 TEUs, market participants said. The added
port fees will likely get passed through to US customers via higher freight
costs, a freight forwarder said. But for the short-term, blank sailings and new
vessel capacity coming online has helped to keep rates steady, according to
market participants. These added costs, paired with broader concerns of a
flagging economy have begun to worry market participants over possible margin
compression in the fourth quarter. By Brad MacAulay and James Marshall Send
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