According to recent reports from market participants, SteelMint learned that Pakistan’s government is actively looking for lifting a ban imposed last year on tanker ships approaching in Pakistan for ship cutting operations.
Last year in the month of February owing to an accident, Pakistan’s government has banned the tanker ships coming to Gadani beach for ship cutting activities. Since then ship breaking industry observed a significant slowdown in the number of tankers beached for ship cutting activities in Pakistan.
However, since last month market observed successive delays in obtaining relevant permissions from government. As it’s already been more than a year’s time under restrictions, participants in ship breaking industry are optimistic towards lifting of ban on tankers anytime soon and reopening of market.
“Recently there were lot of rumors in the market about the lifting of ban on tankers imposed by Pakistan’s government, however, they have granted permissions to ISO certified yards to allow bulkers while such yards are not many yet in the industry. But permissions for tankers are expected to grant within next few days anytime” shared a source.
Supply-side likely to improve in coming days – As an impact of this, the supply side would increase in Pakistan. According to sources, the number of tanker ships arriving in Pakistan for ship breaking will increase again and ship processors may collect for better prices in return. In last one year’s time, Pakistan witnessed diversion of ships to other Asian markets like India or Bangladesh for ship cutting.
Pakistan’s domestic scrap availability is likely to improve further supporting ship plates prices to move down domestically in the country. Pakistan’s demand for scrap is increasing with upcoming projects in steelmaking. However, demand for imported scrap hardly to affect after this.
Ship breaking prices in Pakistan moved down further last week. Prices assessed at USD 430/LDT for general dry bulk cargo and at USD 450/LDT for containers on CNF Pakistan basis respectively.
Imported scrap prices in Pakistan remain rangebound – Current price assessment for Shredded scrap 211 is around USD 382-385/MT, CFR Port Qasim depending on the origin. Offers from few recyclers from UK are still at USD 390/MT, CFR Pakistan. Previous week few quantities of Shredded scrap were sold at USD 385/MT, CFR Pakistan. Offers for HMS 1 in containers from UAE assessed at around USD 375/MT, CFR.
However buying interest still strong in the market over lowering inventories. It seems that buyers have adopted to remain silent and are waiting for the offers to match their expected levels. The impact of currency devaluation has also absorbed in the market. While participants are more optimistic towards international markets as local prices are at par with an international market in Pakistan.
Leave a Reply