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GMS Market Commentary on Shipbreaking in Pakistan in Week 46 - DOLDRUMS!

Steel News - Published on Tue, 20 Nov 2018

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Pakistan has endured a troubling summer, with worrying currency depreciations that have gradually been declining since June (to the tune of about USD 18/LDT so far) and volatile steel plate prices that have shaken the confidence of Gadani Buyers, leading to very few offers locally. Of the offers that are forthcoming, most are in the low USD 400s/LDT.

However, problems for the Pakistani ship recycling sector do not end there. While the government is reportedly negotiating financial assistance from the IMF, further currency devaluations could occur before the year end.

Moreover, a reported ban on the construction of high rise buildings, the postponement of many public sector development schemes and imports of cheap Chinese & Iranian steel products have shattered local business confidence and has led to a shut down of many domestic steel rolling mills in protest.

Finally, after this market’s reopening for tankers and very few arrivals over the summer months, many had been hoping for a fourth quarter resurgence in Pakistan, but that unfortunately seems some ways off at present given the recent most stoppage of recycling activities on tankers due to yet another accident at a local yard.

As such, we expect very little activity from Pakistan in the near future, potentially leading into 2019.

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Posted By : Nanda Koijam on Tue, 20 Nov 2018
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