Pakistan: Shipbreaking Industry at Gadani Remains Inactive, Local Scrap Prices Show Stability

In recent conversations, Steelmint has learned that Gadani has made no substantial impact on the local market following the mini-budget. No new sales have been reported, and Gadani has remained exceptionally inactive. It is expected that recyclers will have to start taking positions for March delivery tonnage at competitive market levels given the diminishing inventory at the yards. The country is still facing serious competition from Bangladesh, which has seen a record number of ships arriving at its shores this season.

Current market conditions emerge clearly as cash buyers start to offload some of the units that they have held on to for a while, which could be a good indicator of where their confidence lies. There has also been a lot of conversation going around regarding more newly available units which will certainly not help price indications from the Buyers.

On a positive note, this week has witnessed a slight improvement in buyer's minds when discussing trading conditions which could potentially lead to a slight release from the negative sentiment experienced so far this year. This could, however, simply be a short-lived recovery since it is expected that a higher supply of dry and container units will be circulated on the back of weakening rates.

The fundamentals in Pakistan undoubtedly remain uncompetitive with their counterparts in Bangladesh and with the latter filling up their recycling yards, any gain in sentiment may be brief.

Local demolition prices move up slightly - Containers have been estimated at a higher USD 440/LDT this week, from last week's rate of USD 430/LDT. Capsize Bulkers have been evaluated at USD 420/LDT, whereas VLCC rates have been assessed at USD 410/LDT.

Plate prices at Gadani have been evaluated at PKR 77,000/MT (USD 552/MT), whereas scrap has been gauged at PKR 56,000/MT (USD 401/MT). Domestic Bala has last been assessed at PKR 73,000-73,500/MT (USD 525-530/MT).

According to our sources, prices of TMT bars and rebars from major steel mills displayed no major change and local scrap prices have remained steady this week.