Supply Chain report 17 April 2026: Freight Costs and Raw Material Shifts

Supply Chain Bottlenecks and Shipping Freight Hikes Reshape Metal Trade flows

On 17 April 2026, the global metal industry continues to navigate a complex landscape of logistic constraints and shifting supply chain dynamics. Indian steel and aluminum producers are particularly alert as new maritime regulations and regional port congestions begin to impact the landed cost of raw materials and the competitiveness of exports.

Rising Freight Rates and Maritime Transition

Container freight rates have seen a 12% uptick over the last three weeks, primarily driven by the mandatory 'Green Corridor' surcharges that came into full effect this quarter. For Indian manufacturers importing high-grade coking coal from Australia or scrap metal from Europe, the cost of logistics now accounts for nearly 15-18% of the total procurement cost, up from 11% earlier this year.

In the Mumbai and Mundra ports, turnaround times for bulk carriers have marginally improved, yet the availability of empty containers for finished steel exports remains tight. This has led to a slight premium on domestic metal prices as local manufacturers prioritize the Indian market over volatile international shipping routes.

Iron Ore and Coking Coal: The Raw Material Crunch

Supply chain stability for basic raw materials remains fragile. In the domestic Indian market, iron ore prices have stabilized between ₹5,400 and ₹5,800 per tonne for 62% grade fines. However, the movement from mines in Odisha and Chhattisgarh to the coastal plants has faced intermittent delays due to the ongoing railway wagon shortages.

Globally, the supply of premium hard coking coal (PHCC) from Queensland has slowed due to late-season heavy rainfall affecting pit-to-port logistics. This has pushed the benchmark prices to approximately $310 per tonne (FOB). Indian integrated steel plants, which rely heavily on these imports, are looking to diversify their sourcing by increasing intake from Mozambique and Russia to mitigate the single-source risk.

Aluminium and Copper: Warehouse Realities

On the London Metal Exchange (LME), copper stocks have seen a drawdown of 4,000 tonnes this week, reflecting a tightening secondary market. In India, the copper scrap trade is witnessing a shift as new quality control orders (QCO) require stricter certification. While this ensures higher quality for the end-user, it has temporarily constricted the supply of 'Berry' and 'Candy' grade scrap, pushing premiums up by 2-3% in the Delhi and Gandhinagar markets.

The aluminium sector is currently grappling with alumina availability. Shortages in the Atlantic basin have caused alumina prices to hover near $480 per tonne. Indian primary producers, despite being largely self-sufficient, have reported increased logistical costs for bauxite transportation as road freight rates in the eastern corridor rose by 5% earlier this month.

Domestic Logistics and Infrastructure Impact

The completion of the Western Dedicated Freight Corridor (DFC) sub-sections has begun to show results for the metal industry. Steel majors are reporting a 20% reduction in transit time between northern consumption hubs and western ports. However, the 'last-mile' connectivity remains a hurdle, often adding 48-72 hours to delivery schedules.

For the MSME sector in India, the current supply chain environment necessitates a 'just-in-case' inventory strategy rather than the traditional 'just-in-time' model. Small-scale manufacturers of galvanized sheets and wire rods are maintaining stock levels for 45 days, compared to the 30-day average seen in previous years, to guard against shipping delays.

Outlook for the Quarter

As we move further into the second quarter of 2026, the focus will remain on how the 'India-Middle East-Europe Economic Corridor' (IMEC) developments bridge the logistics gap. For now, Indian buyers should prepare for moderate volatility in landed prices. While raw material availability is currently adequate, the cost of moving these materials remains the primary driver of price discovery.

Market participants are advised to lock in long-term logistics contracts where possible and monitor the bunker fuel price indices, as any fluctuations in global energy prices will immediately reflect in the surcharges applied to metal shipments.