The value of scrap in the container would become zero if the shipping companies charge them detention demurrage for 30 days. The value of iron scrap is about $5,000 for a container. For a container of 20 feet, the detention charges are about $52 per day and works out to be about $1,750 for 30 days, including various other charges. If other expenses, like ground rent, CFS (container freight station) charges, transportation are added the value of the goods in the container will become zero, Sanjay Mehta, President, MRAI was quoted as saying.

Companies are not in a position to make payments and take deliveries of the goods due to the complete lockdown announced by the government. Further, metal prices have declined by 25-30 per cent since outbreak of coronavirus in China. India’s secondary metal producers had bought the metal scrap overseas three months back based on prevailing price at that time. Unfortunately, the sharp fall in metal prices has now made imported raw materials costlier that finished metal prices.

On the other hand, port congestion has become a major worry for secondary metal and paper recyclers. Since, shipping companies have declared themselves operational, they are asking scrap importers to clear their consignments or pay penalty for engaging the containers beyond the agreed transportation period, said Mehta. MRAI has made various representations to the Ministry of Shipping and domestic and overseas shipping companies for waiver of charges without any success.

In his letter to the Union Finance Minister, Mehta said the economy would be facing hardships for the next few months and incurring such heavy detention charges will be a major burden on small and medium sized recycling companies. Shipping companies see a business opportunity even in the ongoing global pandemic and charge a levy of $104 per container per day for 40-feet container. The charges will not only erode working capital but will also make many small businesses go bankrupt, he said.