Pakistan Ship Breaking Prices Remain Stable; Market at a Standstill
In recent reports, SteelMint has assessed that a number of factories, especially in Punjab, are still closed and will reopen after Muharram. Business is slow, and no new ships have been dismantled last week due to the high prices.
Prices stagnant in the international steel market - According to sources, prices for containers remain unchanged last week at USD 450-460/MT. Similarly, prices for tankers have been assessed at USD 440-445/MT. The rates for general bulk cargoes have been gauged at a constant USD 420-425/MT. Prices mentioned are inclusive of taxes. A 4.5% tax is levied as duties on the import of ships, 4.5% as income tax, and PKR 7600/MT (USD 62/Ton) is taxed on ship breaking.
The ship breaking industry in Pakistan is still facing problems. Working conditions have historically been miserable for the majority of these workers, with limited use of protective equipment and frequent exposure to hazardous materials.
Fatal accidents and injuries are often reported in the local media. In 2016, a deadly fire at Gadani resulted in at least 26 casualties and many more injuries. Consequently, the government placed a ban on the demolition of oil tankers and LPG containers until adequate safety measures were in place. This ban had a significant impact on the ship-breaking industry, causing re-rolling mills to shut down and many workers to lose their jobs. Prices soared, and Gadani lost its market.
The ban was lifted recently in May 2018, but Gadani has not yet reclaimed its position. Only a few oil tankers have since been dismantled, and demand remains low.
The mechanization of some of the hazardous tasks and improved safety precautions may minimize such accidents and help the country's ship-breaking industry regain its status. Market participants are optimistic that Pakistan's ship breaking market will grow in light of the ban lift and will help bring in substantial revenues in the shape of annual taxes.
International HMS prices towards end of last week have been assessed at USD 355/MT, while rates for re-rollable steel plates have been reported at PKR 75,000/MT (USD 609/MT).
source: SteelMint
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