Jiangsu overloading checks affect steel, scrap logistics
Around 18:10 (Beijing time) on October 10, a bridge in Wuxi city of Jiangsu collapsed due to two overloaded trucks, and it caused three deaths and two injuries, and among the overloaded trucks that fell together with the bridge, one was hauling steel products, according to China’s official media Xinhua News report.
After the accident, cities in Jiangsu province including Wuxi, Changzhou and Suzhou, immediately launched frequent and thorough checks on trucks for any overloading risks, Mysteel understands from local governments.
“The accident and the following actions by the local authorities have greatly influenced the transportation in South and East China with Jiangsu in particular,” a steel scrap market watcher from Jiangsu said, noting, “Trucks are stopped and checked one by one at the entrances to highways.”
Jiangsu is China’s second largest steel producing province, China’s largest scrap consuming province, and Wuxi is the country’s stainless steel trading hub other than Foshan in South China’s Guangdong province, Mysteel Global notes.
Transportation of both steel products and scrap has slowed down and trucking charges have increased, local market sources confirmed.
“Trucks overloaded with steel products had been very common in our area, and one truck with a designed loading capacity of 30 tonnes could have carried as much as 50-60 tonnes of steel, but now they have been contained within the designed capacity,” a steel trader from Jiangsu said.
As a result, “logistic service providers have raised their charges by Yuan 20-40/tonne ($2.8-5.6/t),” he added. A Shanghai-based market watcher shared that trucking charges have all been tripled regardless of the distance or the size of the truck.
Higher logistics costs are expected to be supportive to the prices of affected products such as steel and scrap, though it may not be as evident amid the uncertainties of the fundamentals at present, market sources anticipated.
“Steel price movement will factor in the higher logistics costs, though it may just to stabilize the prices instead of pulling them,” the Shanghai source said.
As for the disruption of iron ore and coal transportation in Jiangsu, some market sources estimated the impact not as severe as on steel and scrap.
“Iron ore truck overloading is not as serious as steel, and local steel mills have been very conscious of any overloading now after the accident, so the affection on iron ore is rather limited,” an iron ore procurement official from a Jiangsu-based steel mill said.
A second Shanghai-based market watcher agreed, adding that iron ore and coal have been mainly moved either by water or by rail in Jiangsu.
Written by Olivia Zhang, zhangwd@mysteel.com, Lindsey Liu, liulingxian@mysteel.com and Victoria Zou, zyongjia@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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