With the budget announcement now forthcoming and strong rumors circulating in the local market that an upcoming increase in sales tax is imminent, there is the expectation that prices for ships from Pakistan will decline by about USD 15 per LT (perhaps more).
Furthermore, with India prices surging well ahead of the competition, Gadani buyers’ were left struggling to compete and were unable to fix any units during the course of the week.
Even their favorite tankers (with the advantage of being gas free for man entry only) are being concluded at levels far beyond the competitive reach of local offers and are being diverted to India.
What the budget actually yields this week remains to be seen, however, regardless of the outcome, if India prices continue to persist, Gadani breakers have their work cut out of for them in terms of pushing their own prices up in order to be remain competitive for market tonnage in the immediate future.
Source: steel guru. 5 June 2014