The ship recycling market in Pakistan is witnessing a decline in domestic sheet prices and a lack of purchasing willingness from recyclers due to ongoing economic pressures. This situation continues even as ship prices have maintained a relative stability overall, with no new significant sales reported this week.
Market Situation in Pakistan
According to recent reports, the ship recycling market in Pakistan faced challenges last week. Local sheet prices continue to decline, which has clearly affected the purchasing willingness of recyclers. Despite a relatively weak domestic steel market, ship prices have remained stable compared to last week. Additionally, the exchange rate of the Pakistani Rupee (PKR) has been relatively stable during this period.
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Factors Influencing the Market
In the global market, the supply of alternative steel products, including HR Coil, has helped meet local needs and limited the impact of reduced ship scrap supply. Overall, the market is currently acting cautiously, and lower local steel prices have hurt buying sentiment. In Turkey, the recycling market has been generally stable over the past week, with no significant movements in ship prices observed. In this market, prices for imported scrap and local steel have seen slight improvements, but these increases have not yet translated into stronger ship recycling prices.
Market Trends in Bangladesh
In Bangladesh, the market is facing more stability compared to Pakistan and India. Offers in this market have remained unchanged, and demand has improved. However, domestic sheet prices have decreased, while the US dollar has strengthened.
Challenges Facing Recyclers
The limited supply of attractive ships for recycling has not significantly impacted the Chittagong market, as yards are feeding on previously secured ships. In terms of policies, concerns regarding potential EU restrictions on ferrous scrap exports may indirectly improve domestic recycling demand, even though they are not directly exposed to the EU. Additionally, the sharp rise in domestic fuel prices could lead to increased operational costs and reduced steel demand.
Conclusion
In Gadani, market conditions continue to affect recyclers' sentiment and purchasing willingness. Weak demand is driving down local sheet prices and currency, but these rates are still at supportive levels. Interest in purchasing remains selective, as most facilities are currently busy and a large number of new ships have arrived. There is additional pressure on recyclers, as the supply of alternative steel products is supported by the resupply of steel products from Iran and appropriate tax incentives on scrap imports.
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