Pakistan: Ship Breaking Industry in Hibernation, Local Steel Demand Picks Up

According to sources, Pakistan remains in complete hibernation this week in regard to the shipbreaking industry, with no fresh sales to report. Bangladesh continues to be the main buying destination as Pakistani buyers maintain their inactive stance.

Recyclers are presently concentrating on clearing existing stocks at their yards. The local steel market has, however, picked up the pace with rising demand and improving sentiments.

Unstable sentiment prevails in Pakistan's shipbreaking market - This week has seen no major change in the shipbreaking industry, with prices for dry bulk cargoes estimated at USD 400-410/LDT. Rates for wet bulk cargoes have been related at USD 410-420/LDT whereas prices for containers have been gauged at a constant USD 420-430/LDT.

The plate market has stabilized at PKR 77,000/MT (USD 554) while scrap has been related at PKR 56,000-57,000/MT, with some breakers managing to close sales at PKR 78,000/MT (USD 561) on cash terms. However, cheap scrap being sold at USD 320/MT is sinking buying interest in ships.

Foreign investment hopes to prevent further devaluation - Positive fiscal developments with the UAE investing 6.2bn, following Saudi Arabia, are expected to strengthen the negotiations with IMF regarding any prospective devaluation. If this results in preventing further depreciation, it is anticipated that import-based industries, and recycling in particular, will gain a major boost.

Local scrap prices increase this week - As per recent reports, prices for local scrap like Art Q toke, Art Toke, Art Pure Q and Pure Q Toke have been increased by PKR 1,000-2,000/MT (USD 6-11) on a weekly basis.