May 17, 2008

Price of old vessels soars to USD 750 LTD in Pakistan

Daily Times reported that in Pakistan the prices of scrap producing breakable ships surged sharply by USD 250 per light displacement tonnage to reach at record level of USD 750 LTD in the international market during the last two weeks, hampering the working pace of the local industry.

Ship breakers attributed the higher prices of breakable ships to the increasing demand of the steel coupled with the high fuel oil in the prices during the last three months.

Mr Azam Malik president of Pakistan Ship breakers’ Association told Daily Times that the purchase of the old breakable ships have been stopped in the country by the local ship breakers due to higher prices of ships’ selling companies.

He added that the ship breaking activities have seen a decreasing trend in the country despite high local demand of steel scraps and billets. He also said that if more ships were not purchased by the next month, a large number of daily wagers would be unemployed. Presently, around 5,000 workers are earning their livelihood at Gaddani. He further told that the supply of scrap to local steel re rolling mills has witnessed decline, owing to the lack of scrap steel supplied by ship breaking industry.

Mr Malik said that the country’s ship breakers are now waiting for expected prices decline in the global market so they could buy required number of ships to meet the local demand.

Ship breakers have set the target to produce around 500,000 LTD steel scraps by the end of the years to cope with the local demand of one million LTD scrap steel in the country.